In a recent audit of Federal Acquisition Services (FAS)’s transition to electronic files, the General Services Administration (GSA) Office of Inspector General (OIG) concluded that “FAS has not effectively digitized Federal Supply Schedules contract files.” The objective of the OIG audit was to determine whether: (1) FAS completed all stages of the Federal Supply Schedules (FSS) contract digitization process, and (2) FAS’s official electronic contract files contain all contract documentation in a usable format and structure as required by federal regulations and FAS policy.
OIG identified two key findings during the audit, that the FAS electronic contract files are (1) missing key contract documentation, which impairs FAS’s ability to effectively administer its schedules contracts and comply with Federal Acquisition Regulation (FAR) documentation requirements and (2) not organized and named in a consistent and logical manner, which creates inefficiencies in the administration of contracts.
In a practical sense, the audit identified that incomplete and missing contract files leave FAS contracting officers without critical information needed to administer contracts. That has a direct impact on GSA Schedule holders – you must ensure that your own contract files are impeccable. In our support of hundreds of government contractors, we have been called on countless times to supply contract records to contractors and GSA contracting officers.
You cannot rely on GSA to ‘fill in the gaps’ in your missing documentation, and there can be serious risks associated with incomplete records. As an example, if an auditor questions your awarded terms and conditions, being able to produce the signed modification proving you negotiated a 2% discount off of MFC prices down from the originally awarded 5% could mean avoiding tons of price reduction penalties! Additionally, your internal records are subject to review and audit for not less than three years after final payment.
What is FAS doing to address the problems? The OIG made the following recommendations: (1) remediate identified deficiencies; (2) develop and implement policies to identify minimum documents necessary for electronic files to comply with FAR and FAS policy; (3) develop and implement a strategy for periodic reviews; and (4) establish a follow-up process.
While GSA continues to iron out the kinks in their digitization process, be sure your own contract records, whether digital or paper, are managed impeccably. Success at your next Contractor Assessment, price negotiation, renewal, or offer for a new 20 year contract may depend on it.