OIG report highlights shortcomings in FDA’s IT acquisition procedures

The US Food and Drug Administration uses the HIVE IT system for genetic research. (Source: FDA)

The Office of the Inspector General (OIG) of the US Department of Health and Human Services (HHS) is calling on the Food and Drug Administration (FDA) to improve its information technology (IT) procurement processes. Overall, the oversight agency determined that the FDA followed federal regulations, but there were many areas in which it failed to properly assign responsibilities and maintain records.

The Office of the Inspector General published a report summarizing its findings of a sample of five FDA IT system purchases totaling nearly $24 million between 2018 and 2020. It notes that the regulatory agency spent more than $2.3 billion on IT products and services during That time, and in 2020 alone it spent nearly $683 million.

The Office of the Inspector General said it conducted an audit of the FDA’s IT procurement as part of a broader effort to understand the financial integrity of HHS programs.

“This audit is part of a broader set of HHS OIG audits that examine various aspects of HHS contracting operations, including payment accuracy, eligibility verification, management and administration, and data security,” the OIG said. “Our goal was to determine whether the FDA administered contracts to acquire information technology in accordance with applicable federal acquisition regulations and HHS acquisition regulations and policies.”

The Office of the Inspector General noted in its report that executive branch agencies are required to follow the Federal Acquisition Regulation (FAR). The FDA must also comply with the HHS Acquisition Regulation (HHSAR), as well as the guidance in the FDA Personnel Handbook that provides details about administrative and program policies, responsibilities, and procedures, including those governing procurement.

For the most part, the FDA contracting officials reviewed in the review followed federal policies and regulations, the report said, but failed in some areas. For example, they often failed to properly appoint a Contracting Officer’s Representative (COR) to help monitor and administer the contract. A COR is a person who has the technical knowledge to properly supervise contract work, direct the technical aspects of the work, and ultimately notify the contracting officer if there are any deviations from the performance of the plan.

Of the five purchases reviewed, OIG said the FDA failed to properly assign a COR or to maintain and complete COR duties in three of the orders. For two of those contracts, the Office of the Inspector General (OIG) said no COR was designated using a COR memorandum, even though the FDA has designated CORs in their contract files. In the third arrangement, the signature of the FDA contracting officer was missing from the COR memo.

“Although personnel performed COR tasks such as reviewing invoice and order documents and completing a COR Certificate and Statement of Completion, the COR designation was not consistent with the FAR and with the requirements of the Acquisition Policy and Oversight Branch of the FDA,” the report states. “Moreover, FDA centers and offices have failed to complete contract file checklists, which are intended to ensure that contract administration requirements, such as completion of a COR memorandum, have been accomplished.”

“An individual acting as the COR of a contract without a signed COR specifying performance duties and actions for which she is not authorized to perform could affect the effectiveness of FDA oversight of the technical and program aspects of the contract and the reliability and timely completion of the contractor’s performance and evaluation and could result in federal government costs additional contracts,” the report added.

The OIG also said the FDA failed to complete required contractor performance assessments, properly document all major contracting decisions or activities, and include the required acquisition strategy statement in the orders’ acquisition plans. The agency indicated that the Food and Drug Administration responded to its report and approved the findings and recommendations.

“The FDA stated that it has increased its reviews and audits of acquisition files to ensure that all applicable contract documents are properly prepared and uploaded in [Purchase Request Information System (PRISM)]said the Office of the Inspector General. “The FDA stated that it has updated its policies and procedures to ensure that all contracting decisions made by the contracting officer are documented and that the documentation will include the rationale for any commercial judgments.”

The watchdog said the FDA plans to evaluate the acquisition lifecycle process to ensure that all acquisition activities are in line with current policies, procedures and established best practices.

On Dec. 20, 2022, Lisa Ruffin, director of public health strategy and analysis at the Food and Drug Administration, responded to a draft OIG report and said that the agency does not believe that a contracting officer representative needs to be named on each requisition and that it has discretion When requesting a review it should be added under FAR.

“To increase visibility when COR is assigned, the FDA now tracks COR designations through a custom data field in PRISM,” the FDA said. “also, [FDA’s Office of Acquisitions and Grants Services (OAGS)] He increased his reviews of Acquisitions Files, including COR designation documents, within the Operational Supervisory Chains of Command, as well as further Acquisitions File Audits and other reviews by the Acquisition Policy and Oversight Branch.”

The agency has continued to clarify other issues raised by OIG, has updated its procedures and will remind contracting officials of their responsibilities to ensure they comply with federal regulations.

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