For nearly 25 years, the United States has provided the Cuban people with alternative sources of news and information. In 1983, Congress passed the Radio Broadcasting to Cuba Act to provide the people of Cuba, through Radio Martí, with information they would not ordinarily receive due to the censorship practices of the Cuban government. Subsequently, in 1990, Congress authorized BBG to televise programs to Cuba. According to BBG, the objectives of Radio and TV Martí are to (1) support the right of the Cuban people to seek, receive, and impart information and ideas through any media and regardless of frontiers; (2) be effective in furthering the open communication of information and ideas through use of radio and television broadcasting to Cuba; (3) serve as a consistently reliable and authoritative source of accurate, objective, and comprehensive news; and (4) provide news, commentary, and other information about events in Cuba and elsewhere to promote the cause of freedom in Cuba. OCB employs several avenues to broadcast to Cuba, including shortwave, AM radio, and television through various satellite providers and airborne and ground-based transmitters (see fig. 1). IBB’s international broadcasters generally must comply with the provisions of the U.S. Information and Educational Exchange Act of 1948 (commonly known as the Smith-Mundt Act), as amended, which bars the domestic dissemination of official American information aimed at foreign audiences. In 1983, however, the Radio Broadcasting to Cuba Act authorized the leasing of time on commercial or noncommercial educational AM radio broadcasting stations if it was determined that Radio Martí’s broadcasts to Cuba were subject to a certain level of jamming or interference. Similarly, in 1990, the Television Broadcasting to Cuba Act authorized BBG to broadcast information to the Cuban people via television, including broadcasts that could be received domestically, if the receipt of such information was inadvertent. BBG has interpreted the act to allow OCB to use domestic television stations. In fiscal year 2007, OCB obligated over $35 million in support of its mission. As shown in figure 2, OCB obligated about 50 percent of this amount to salaries, benefits, and travel for OCB employees and 41 percent on mission-related contracting efforts. OCB obligated nearly $3 million to procure talent services. Federal statutes require, with certain limited exceptions, that contracting officers shall promote and provide for full and open competition in soliciting offers and awarding government contracts. The FAR states that full and open competition, when used with respect to a contract action, means that all responsible sources are permitted to compete. The process is intended to permit the government to rely on competitive market forces to obtain needed goods and services at fair and reasonable prices. When not providing for such competition, the contracting officer must, among other things, justify the reason for using other than full and open competition, solicit offers from as many potential sources as is practicable under the circumstances, and consider actions to facilitate competition for any subsequent acquisition of supplies or services. For contracts that do not exceed the simplified acquisition threshold—currently $100,000 with limited exceptions—contracting officers are to promote competition to the maximum extent practicable. In December 2006, IBB awarded contracts to two Miami-based radio and television broadcasting stations, Radio Mambi and TV Azteca, to broadcast Radio and TV Martí programming, respectively. IBB justified the use of other than full and open competition on the basis of two specific statutory authorities cited in the FAR—that there was only one responsible source capable of meeting the agency’s needs and that there was an unusual and compelling urgency to award the contract. Table 1 provides selected information on the two contracts. OCB’s talent services contracts typically fall below the simplified acquisition threshold and therefore are solicited and awarded directly by OCB. OCB generally awards each talent services contractor a blanket purchase agreement, which provides OCB a simplified method of obtaining specific services as needed during the course of the year. On a quarterly basis, OCB places orders against the agreements, specifying the anticipated amount of services required during that period. While certain competition requirements do not apply below the simplified acquisition threshold, contracting officers are to promote competition to the maximum extent practicable. IBB’s approach for awarding the Radio Mambi and TV Azteca contracts did not reflect sound business practices in certain key aspects. IBB’s approach was predicated on the confluence of several interrelated events—ongoing interagency deliberations, the issuance of a July 2006 report by the Commission for Assistance to a Free Cuba, and concerns about the health of Fidel Castro. According to BBG and IBB officials, these events required a course of action to obtain additional broadcasting services to Cuba quickly by using other than full and open competition. In certain respects, however, IBB did not document in its contract files key information or assumptions underlying its decisions to not seek competitive offers, limit the number of potential providers it considered, or the basis used to negotiate the final prices for the services provided. In addition, IBB did not actively involve its contracting office until just prior to contract award. Finally, while justifying the December 2006 award of the two contracts on the basis of urgent and compelling need and the determination that only one source would meet its minimum needs, IBB chose to exercise multiple options on the two contracts to extend their period of performance into 2008 and has only recently taken steps to identify additional providers. Our prior work has found that establishing a valid need and translating that into a well-defined requirement is essential for federal agencies to obtain the right outcome. Our review of IBB’s contract files and interviews with program and contracting officials identified several interrelated events that established the need to increase radio and television broadcasting to Cuba. BBG and IBB officials noted that beginning in the spring of 2006, agency officials were involved in interagency discussions with officials from the Department of State, the Department of Defense, the National Security Council, the U.S. Agency for International Development, and other agencies on the need to expand broadcasting options. These discussions coincided with the issuance of the July 2006 report by the Commission for Assistance to a Free Cuba, which recommended funding the transmission of TV Martí by satellite television. The report did not provide a time frame in which this was to be completed, nor did it address expanding radio broadcasting. Additionally, BBG and IBB officials noted that shortly after the release of the report there was widespread concern about the health of Fidel Castro and that his death could result in unrest in Cuba, adding to the urgency to find additional ways to broadcast news to Cuba. IBB officials told us that based on their internal deliberations and discussions with other agencies involved, it was clear that the expectation was for IBB to quickly identify additional broadcasters, including radio providers, and award the resulting contracts quickly to address potential unrest in the event of a transfer of power. IBB officials were unable to provide documentation of certain classified aspects of the deliberations, or the specific time frame in which these activities were to be completed. Given this expectation, IBB subsequently decided against seeking competitive offers from radio and television broadcasters. IBB officials told us they believed they could not do so for several reasons, including concerns that publicly seeking competitive offers would not yield responses from potential service providers that met its needs; advertising its plans would alert the Cuban government of IBB’s intentions, which might enable Cuba to jam the new broadcasts; and IBB had not discussed its plans with cognizant congressional committees and, in particular, its efforts to comply with the Smith- Mundt Act and other relevant legislation. IBB officials determined that they would limit the number of providers they would consider and quickly developed a set of basic requirements that broadcasters would need to meet. For radio, IBB wanted a Spanish- language station with the strongest AM signal to reach as much of Cuba as possible. To do so, officials with IBB’s Office of Marketing and Program Placement stated they reviewed a prior consulting study and broadcasting databases maintained by the Federal Communications Commission, and consulted with OCB on Cuban listening habits. For television, IBB wanted a station with a limited domestic audience and one that had a contract with DirecTV, since the DirecTV signal can be received in Cuba. At IBB’s request, OCB provided a list of Miami channels carried by DirecTV, highlighting three Spanish-language stations and one English-language station for consideration. BBG and IBB officials subsequently told us that their decision to limit television broadcasters to the Miami area was based on information that indicated that DirecTV receivers in Cuba likely came from the Miami area and therefore were programmed to receive only Miami television stations. A senior IBB official provided IBB’s Office of Engineering a list of four radio and three television stations and requested that the office assess the extent to which the television stations’ signals were viewable in the United States and the extent to which the radio stations’ signals would reach Cuba. Office of Marketing and Program Placement officials then made two trips to Miami to meet with and determine these stations’ willingness to broadcast Radio and TV Martí programming. In making their recommendation for a radio broadcaster to a senior IBB official, Marketing and Program Placement officials concluded that Radio Mambi provided the most powerful signal among those stations surveyed that could reach most of Cuba. IBB officials acknowledged, however, that this station was likely jammed in Havana as there is a Cuban station that broadcasts on the same frequency as Radio Mambi. IBB officials believed that broadcasting on two frequencies that cover most of Cuba would be the most effective way to overcome the Cuban government’s jamming efforts. In recommending a television broadcaster, Marketing and Program Placement officials initially recommended a television station (other than TV Azteca) based on the station’s verbal offer to split its DirecTV signal, enabling it to broadcast TV Martí programming only to Cuba and not to domestic audiences. According to IBB officials, subsequent to their recommendation the television broadcaster withdrew its offer once it determined it could not split its DirecTV signal and was unwilling to sell time for which it already had programs. Consequently, IBB decided to contract with TV Azteca. While TV Azteca’s broadcasts could be viewed by domestic audiences, IBB officials believed that since its signal covered a small domestic area, it better met the intent of the Smith-Mundt Act to limit the extent to which broadcasts intended for foreign audiences could be received domestically. In a sole source environment, the government cannot rely on market forces to determine a fair and reasonable price and therefore must conduct market research to do so. As part of its market research, IBB officials in August and September 2006 asked a consultant to gather pricing information from the radio and television stations being considered without identifying IBB as the potential buyer. The consultant forwarded prices quoted by seven radio and television stations which varied significantly in terms of the dates, time slots, and prices offered. For instance, the information quoted by the television stations was based on one-half hour “infomercials,” which IBB officials believed was useful to gauge the relative prices that might be offered by the stations, but was of only limited value to negotiate specific prices for the actual programming it sought to broadcast. While the contract files did not provide the basis by which IBB determined the final prices, IBB officials stated that after they had selected Radio Mambi and TV Azteca, the stations provided quotes for various broadcast times, which IBB officials used to reach a final price agreement. According to BBG’s acquisition regulations, programming offices should discuss a prospective request for other than full and open competition with the contracting office as early as possible during the acquisition planning stage. The regulations note that these discussions may resolve uncertainties, provide offices with names of other sources, and allow proper scheduling of the acquisition, among other benefits. Further, our prior work has found that to promote successful acquisition outcomes, stakeholders with the requisite knowledge and skills must be involved at the earliest point possible. This helps ensure that the acquisition is executable and tailored to the level of risk commensurate with the individual transaction. We found, however, that neither the contracting or legal offices were actively involved in developing the acquisition strategies for the radio and television broadcasting services, nor were they involved in developing or reviewing the terms and conditions until very late in the acquisition process. For example, according to IBB officials, the substance of the agreements with the radio and television broadcasters was generally completed by mid-October 2006. However, the contracting officer who awarded the contracts indicated he was not made aware of the planned acquisition until Friday, December 1. At that time, IBB notified the contracting officer to prepare to award the contracts as early as the following Monday, based on the terms and conditions that Marketing and Program Placement officials had agreed to with the broadcasters. According to representatives from IBB’s contracting and legal offices, they had been unaware of the proposed contract actions until that time, precluding their ability to provide input into the acquisition strategy or to assess the potential for conducting a more robust competition. As a result, the contracting office’s role appeared to be limited to verifying the terms and conditions that the programming officials had reached with the broadcasters during their internal assessment. When agencies cite urgency as the basis for using other than full and open competition, the FAR requires them to describe the actions, if any, the agencies will take to remove the barriers for competition before any subsequent acquisition for the services is required. IBB, however, had taken few steps to determine how it might compete future broadcasting requirements. Rather, IBB extended the radio broadcasting contract by just over 8 months through February 2008, when it ended the contract due to budget constraints. Similarly, IBB exercised two options to extend the television broadcasting contract by a total of 12 months to June 2008. IBB’s contracting officer told us that, in his opinion, by December 2007 IBB had sufficient knowledge of its requirements, and sufficient time to plan for and conduct a full and open competition, if IBB continued to require these services. As an interim measure, on April 25, 2008, agency officials advertised in Federal Business Opportunities their intention to exercise the final option with TV Azteca to extend contract services into December 2008. In the notice, IBB officials identified the specific times during which TV Martí programming was being broadcast and the other services provided by TV Azteca and requested that interested firms submit adequate documentation of their capability to provide these services. While the notice did not constitute a solicitation and IBB was not seeking proposals, quotes, or bids, the notice indicated that if IBB received responses it might consider competing the contract rather than exercise the option. IBB received no responses to the notice within the 15-day time period allowed. OCB’s practices provide limited visibility into key steps in soliciting, evaluating, and selecting its talent services contractors. In that regard, OCB does not require that managers document instances in which resumes were received from sources other than formal solicitation means nor require that managers document their evaluation of the resumes received. IBB officials told us they would expect that pursuant to their guidance the contract files would contain such documentation. Additionally, OCB relies on the rates provided by IBB’s Contracting for Talent and Other Professional Services Handbook when justifying what it pays for talent services. The usefulness of the handbook’s pricing guidance, however, may be limited as the rates in the handbook are neither current nor based on the local Miami market and because OCB, at times, has reduced the rates it pays due to budget constraints. In general, OCB officials believe that they are paying their talent services contractors below market rates. Both the FAR and IBB guidance require that contracts be competitively solicited and awarded. To identify qualified contractors, OCB seeks resumes through three different means of solicitation: (1) quarterly Federal Business Opportunities notices, (2) annual advertisements in the Miami Herald newspaper, and (3) public building notices in OCB’s lobby. These solicitations generally identify the wide range of services OCB requires annually, but do not specify the amount of work required or when the work may be needed. According to OCB officials, these solicitations result in a continuous stream of resumes throughout the year that are directed to its contracting office. Overall, an OCB official estimated OCB received over 600 resumes in 2006. Contracting officials group the resumes into talent and production services categories and distribute them to the pertinent radio, television, and technical managers. OCB’s practices, however, provide limited visibility into the source of the resumes it receives, including those that may be received from outside the formal solicitation processes. In 31 of the 37 contract files we reviewed, OCB provided copies of all three formal solicitations to document compliance with competitive solicitation requirements. In at least three instances, however, the file contained this documentation even though the managers we interviewed stated that the resume was obtained through a recommendation from an OCB employee or contractor. In one case, for example, a manager noted that the broad nature of the solicitation did not provide suitable candidates for a specific requirement. Consequently, the manager solicited referrals from colleagues and through this means found a contractor who met the requirement. All of the seven managers we spoke with indicated that they have received, at one point or another, resumes from outside of the formal solicitation process. A senior OCB official stated that OCB does not, however, require program managers to document when resumes are received outside of the formal solicitation process. A senior IBB contracting official stated that any resume received informally should be sent to OCB’s contracting office, which in turn should distribute it to the relevant managers for consideration along with all of the other resumes received. Further, OCB managers do not document their evaluation of the resumes they review or their rationale for selecting one contractor over another. After receiving resumes from the contracting office, the managers are responsible for evaluating the resumes and, in turn, recommending contractors for award. Six managers said that they reviewed the resumes they received to different degrees. For example, some managers indicated that they always reviewed the resumes obtained through OCB’s formal solicitations when selecting a contractor, though none documented their assessments. On the other hand, three managers indicated that they have selected contractors based on the recommendation of an OCB employee without reviewing other resumes. While each of the 37 contract files we reviewed documented the rationale for selecting the contractor, there was no documentation to indicate that other potential contractors were considered. The Contracting for Talent and Other Professional Services Handbook requires, however, that contracting personnel maintain contract files, which must contain a justification for the contractor selected along with an evaluation of prospective contractors. OCB contracting officials told us that the guidance was not clear on how OCB was to meet this requirement. Senior IBB contracting officials with whom we spoke told us that pursuant to the guidance in the handbook, they would expect to see documentation in OCB’s contract files of all the contractors considered and their rationale for selecting one contractor over another. After selecting a talent services contractor for award, OCB managers generally rely on the price ranges established in IBB’s handbook to justify the price OCB will pay for the service. In that regard, we found that the rates for each of the 37 contracts we reviewed were within or below the rates established in IBB’s handbook. OCB managers explained that the rates actually paid may fall below IBB’s guidance because OCB’s budgetary resources limit what it can afford to pay for these services. For example, an OCB manager told us that in February 2008 the decision was made to reduce programming costs, including decreasing the rates paid to many contractors, to stay within OCB’s budget. The usefulness of the handbook’s pricing guidance may be further limited given that the rates reflected in the handbook are not based on the local Miami market and are not current. For example, the market research used to support the rates for on- and off-camera performers was dated between October 2000 and February 2001 and only referenced prices in the Washington D.C., and Baltimore, Maryland, areas. IBB indicated that it is in the process of determining how to update its handbook, including its guidance on how managers and contracting officers are to use the rates when establishing prices for specific contracts. For their part, OCB officials believed that they were paying less than the local market rate for talent services. Competition is a fundamental principle underlying the federal acquisition process, as it allows federal agencies to identify contractors who can meet their needs while allowing the government to rely on market forces to obtain fair and reasonable prices. The competition laws and regulations provide agencies considerable flexibility to use noncompetitive procedures, if adequately justified, to meet their needs and permit agencies to use less rigorous procedures for lower dollar acquisitions. In certain respects, however, IBB’s and OCB’s practices to award the contracts we reviewed lacked the discipline required to ensure transparency and accountability for its decisions with regard to these matters. IBB did not fully document information or assumptions underlying its decisions, involve its contracting office in a timely manner, or actively take steps to promote competition on future efforts. Similarly, OCB’s practices do not fully adhere to the requirements established by IBB’s handbook to document important steps in soliciting and awarding talent services contracts, in part due to questions about how to meet the handbook’s requirements. Furthermore, the pricing guidance in the handbook may be of limited use as a tool to justify prices paid to talent services contractors. Collectively, these weaknesses underscore the need for IBB and OCB to improve their practices to enhance competition, improve transparency, and ensure accountability. To better inform acquisition decisions, improve transparency, and ensure that competition is effectively utilized, we recommend that the Broadcasting Board of Governors direct IBB to take the following three actions: reinforce existing requirements to fully document information and assumptions supporting key decisions, such as when awarding contracts using other than full and open competition; reinforce existing policy for its programming staff to involve contracting personnel at the earliest possible time during the acquisition planning stage; and plan for full and open competition on any future contracts for radio and television broadcasting services that exceed the simplified acquisition threshold. With respect to improving IBB’s guidance governing contracts for talent services, we recommend that the Broadcasting Board of Governors direct IBB to take the following two actions: clarify requirements in IBB’s Contracting for Talent and Other Professional Services Handbook on the receipt and evaluation of resumes and ensure that OCB’s practices are consistent with IBB’s guidance, and determine how the pricing guidance in IBB’s handbook could better meet users’ needs as part of its planned revision to the handbook. In written comments on a draft of this report, BBG did not formally comment on our recommendations. BBG subsequently informed us that it did not take exception to our recommendations and has begun to take steps to implement them. In its written comments, BBG expressed concern that the draft report title may be misconstrued as an evaluation of the overall fitness of the agency’s contracting efforts. We modified the draft report title for additional clarity. BBG also noted that we did not have access to certain classified information, which BBG officials believed prevented them from fully illustrating the sense of urgency that surrounded their efforts to award the broadcasting contracts. We noted in the draft report that BBG was unable to provide documentation of certain classified aspects of the deliberations, but we did not question BBG’s determination that there was an urgent and compelling need to award the broadcasting contracts. Rather, we noted that the agency failed to follow sound practices in such areas as documentation, stakeholder involvement, and planning for future competition, practices that are required by federal or agency acquisition regulations, and were not related to or dependent on BBG’s disclosure of classified information. BBG also provided additional context for the actions it took in awarding the broadcasting contracts and OCB’s processes for awarding talent services. We believe the draft report reflected this information, but have, where appropriate, incorporated BBG’s comments. These comments are reprinted in appendix II. BBG also provided technical comments, which we incorporated where appropriate. As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 15 days from the report date. At that time, we will send copies of this report to interested congressional committees; the Broadcasting Board of Governors; the Executive Director, Broadcasting Board of Governors; the Director, Office of Cuba Broadcasting; the Secretary of State; and the Director, Office of Management and Budget. This report will also be made available to others on request. This report will be available at no charge on GAO’s Web site at http://www.gao.gov. If you or your staff have any questions about this report or need additional information, please contact me at (202) 512-4841 or huttonj@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. Staff acknowledgments are listed in appendix III. Our objectives were to evaluate the processes used (1) by the International Broadcasting Bureau (IBB) to award the Radio Mambi and TV Azteca contracts, and (2) by the Office of Cuba Broadcasting (OCB) to award its talent services contracts. For the purposes of this review, talent services contracts refer to those contracts awarded by OCB for writers, performers, program hosts, reporters, and technical support required to produce and broadcast radio and TV news and entertainment programming. To determine the laws and regulations governing the award of these contracts, we reviewed the Competition in Contracting Act, the Federal Acquisition Regulation, the Broadcasting Board of Governors’ (BBG) Acquisition Regulations, and IBB’s Contracting for Talent and Other Professional Services Handbook. Collectively, these provide guidance applicable to IBB and OCB on soliciting, evaluating, and awarding contracts above and below the simplified acquisition threshold of $100,000. We also reviewed the Smith-Mundt Act, as amended, as well as the Radio Broadcasting to Cuba Act and the Television Broadcasting to Cuba Act to determine the authority by which OCB may broadcast radio and television programming to Cuba. We did not specifically assess whether the award and the terms and conditions of the broadcasting contracts were in compliance with these acts. To evaluate the processes used by IBB to award the Radio Mambi and TV Azteca contracts, we reviewed the contract files to determine the information and assumptions supporting IBB’s decisions leading to the award of the two contracts in December 2006. As both contracts were awarded using other than full and open competition, we reviewed IBB’s justification and approval documents and other unclassified documentation supporting the solicitation process and award decision, including the July 2006 report of the Commission for Assistance to a Free Cuba. We also interviewed officials in IBB’s offices of Marketing and Program Placement, Engineering, and Contracts, as well as officials from BBG’s offices of General Counsel and Congressional Relations, to determine their roles and responsibilities to identify potential service providers and to negotiate and award the two contracts. Additionally, we interviewed the Director, OCB, and other senior OCB officials, as well as officials from the Department of State, to obtain information on their involvement with the award of these contracts. To assess the processes used by OCB to award its talent services contracts, we compiled information from the Federal Procurement Data System-Next Generation on the contracts awarded by OCB from fiscal years 2005 through 2007. This analysis identified 723 contracts or contract actions valued at over $3,000 for various goods and services. We then selected a stratified random selection of 37 talent services contracts— examining at least 10 from each year—for a more in-depth review. Because of our sample size, the results of our analysis of these contracts can not be generalized to describe the process used to award all of OCB’s contracts. Specifically, we reviewed the contract files to determine the extent to which the files contained documentation of the process used to solicit and evaluate resumes from potential talent services contractors. We also analyzed how the rates paid to the contractors compared against the rates recommended by IBB’s handbook. We also interviewed OCB program managers and senior contracting officials to obtain insight into how OCB determined its requirements and selected talent services contractors. We interviewed senior IBB officials to obtain information on how IBB’s handbook was developed and the procedures that OCB should follow when awarding talent services contracts. To provide context for OCB’s contracting activities, we analyzed budget and financial data provided by BBG’s Chief Financial Officer for fiscal year 2007 and verified our summary of the information using budget activities data provided by OCB’s Director of Administration. We conducted this performance audit from February 2008 through June 2008 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The following are GAO’s comments on the Broadcasting Board of Governors’ letter dated July 2, 2008. 1. As noted by BBG, the draft report provided to BBG correctly characterized the scope of GAO’s review. In that regard, we reviewed two broadcasting contracts awarded by IBB on behalf of OCB. Similarly, the draft report noted that the results of our analysis of OCB’s talent contracts are not generalizable to the processes used by OCB to award all of its contracts. Our work, however, does provide a sound basis for discussing OCB’s processes for awarding its talent services contracts, which are essential for providing the on-air talent, writers, and technical support services needed to produce and broadcast its programming. We modified the draft report title for additional clarity. 2. We noted in the draft report that BBG was unable to provide documentation of certain classified aspects of deliberations involving several agencies, including the National Security Council and the Departments of Defense and State. BBG officials stated that they were not authorized to disclose this information. As a result, BBG officials expressed concern that they were unable to fully illustrate the sense of urgency that surrounded their contracting efforts. We do not see this as a limitation to our scope, however, as we did not question BBG’s determination that there was an urgent and compelling need to award the broadcasting contracts. Rather, we noted that the agency failed to follow sound practices in such areas as documentation, stakeholder involvement, and planning for future competition, which are required by federal or agency acquisition regulations, and are not related to or dependent on BBG’s disclosure of classified information. We also note that the July 2006 report by the Commission for Assistance to a Free Cuba is unclassified and publicly available on the Commission’s Web site. 3. We believe the draft report appropriately reflected the context and process used by IBB to identify and award the radio and television broadcasting contracts. We do note, however, that the contract files do not make reference to the 2002 engineering study; rather, IBB officials provided that information during the course of our review to supplement the information in the files. We also note that the 2002 engineering report discussed only radio stations, and not television stations. In that regard, we found that OCB identified four local Miami television stations carried on DirecTV for IBB’s consideration in August 2006. 4. We stated in the draft report that as an interim measure to conducting a full and open competition, on April 25, 2008, agency officials advertised in Federal Business Opportunities their intention to exercise the final option with TV Azteca to extend contract services into December 2008. We note, however, that agency officials had not taken any action in this regard until we brought it to their attention during the course of our review that they were not in compliance with the notice requirements prescribed by the Federal Acquisition Regulation. 5. We believe the draft report appropriately reflected the context and process used by IBB to identify and award the radio and television broadcasting contracts. As the draft report noted, however, IBB did not document in its contract files key information or assumptions underlying its decision not to seek competitive offers, to limit the number of potential providers it considered, and to limit the basis used to negotiate final prices for the services provided. In these cases, IBB officials supplemented the information contained in the contract files by providing information and e-mails from their personal files. We do note that BBG’s description of TV Azteca as the best overall value to the government (factoring the broadcast schedule times, surrounding programming, as well as cost) is somewhat inconsistent with the information contained in the contract files and subsequently provided by IBB. Our review found that TV Azteca was the only television station with a feasible offer after a preferred station withdrew its offer, and thus became the basis for IBB’s determination that only one responsible source could meet its needs. In addition to the contact above, Timothy J. DiNapoli, Assistant Director; Katherine Trimble; Justin Jaynes; Leigh Ann Nally; Julia Kennon; and John Krump made key contributions to this report. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary: The United States has long provided the Cuban people with alternative sources of news and information. As part of this effort, in December 2006 the International Broadcasting Bureau (IBB) awarded sole-source contracts to two Miami radio and television stations--Radio Mambi and TV Azteca--to provide additional broadcasting options. Additionally, the Office of Cuba Broadcasting (OCB) annually awards millions of dollars in contracts for talent services--writers, reporters, and technical support--needed to produce and broadcast news and entertainment programming. GAO evaluated the processes used to award (1) the Radio Mambi and TV Azteca broadcasting contracts, and (2) talent services contracts. We reviewed contract files and other documentation and interviewed program managers and contracting officers to determine the process used to award the two broadcasting contracts and a nongeneralizable selection of 37 talent services contracts. IBB's approach for awarding the Radio Mambi and TV Azteca contracts did not reflect sound business practices. According to officials from IBB and the Broadcasting Board of Governors--IBB's and OCB's parent organization--the confluence of several interrelated events--ongoing interagency deliberations, the issuance of a July 2006 report by a Cabinet-level commission, and concerns about the health of Fidel Castro--required them to quickly obtain additional broadcasting services to Cuba. Competition laws and regulations provide agencies considerable flexibility to use noncompetitive procedures, if adequately justified, to meet their needs. In certain respects, however, IBB did not fully document in its contract files key information or assumptions underlying its decisions to not seek competitive offers, limit the number of potential providers it considered, or the basis used to negotiate the final prices for the services provided. Additionally, IBB did not actively involve its contracting office until just prior to contract award, though agency regulations and our prior work identify that timely involvement by stakeholders helps promote successful acquisition outcomes. Finally, though it partly justified its awards based on urgency, IBB exercised multiple options on the two contracts to extend their period of performance into 2008. Only recently has it taken steps to identify additional providers. OCB's practices for soliciting, evaluating, and selecting its talent contractors provide limited visibility at key steps. OCB issues quarterly announcements in Federal Business Opportunities, advertises annually in a local newspaper, and posts announcements at OCB's headquarters. OCB does not require, however, that managers document instances in which resumes were received from sources outside these processes, such as when a contractor is recommended by an OCB employee. Further, OCB does not document why other potential providers were not selected as required by IBB's guidance, in part due to questions about how to meet this requirement. Lastly, OCB managers use an IBB handbook to justify how much it pays for talent services, but the usefulness of the handbook's pricing guidance may be limited as the recommended rates are not current or based on the local market.