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July 24, 2013 By AMK

Boeing told to repay DoD after charging $2,286 for $10 part

The Pentagon’s purchasing agency says Boeing Co. (BA) must refund $13.7 million in excessive prices charged on spare parts, including a $10 device for which the defense contractor charged $2,286 apiece.

The Defense Logistics Agency “is seeking a refund from Boeing,” spokeswoman Michelle McCaskill said in an e-mailed statement. “The refund will be for the full $13.7 million identified” and will be requested by July 31, she said.

The agency overpaid about $1.3 million for 573 of the aluminum “bearing sleeves” used on an aircraft’s main landing-gear door that should have cost $10 each, the Pentagon’s inspector general said in an audit labeled “For Official Use Only.”

Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform adequate oversight, and from Boeing’s failure to pass on savings it won from subcontractors, according to the complete audit report. A summary of the findings was reported by Bloomberg News on June 7.

Keep reading this article at: http://www.bloomberg.com/news/2013-06-19/boeing-told-to-repay-after-charging-2-286-for-10-part.html

Filed Under: Government Contracting News Tagged With: DCAA, DLA, DoD, federal contracting, overpayment

June 27, 2013 By AMK

Improper vendor payments of $1.1 billion made in FY 11, DoD has no corrective action plan

The Defense Department is falling down in its efforts to comply with laws requiring a crackdown on improper payments, producing estimates that are “neither reliable nor statistically valid” due to long-standing weaknesses in financial reporting, an audit found.

The Pentagon’s reported $1.1 billion in improper payments to contractors and vendors for fiscal 2011 is questionable, according to a Government Accountability Office report released June 6, 2013, in part because managers did not systematically identify the programs most vulnerable to bad payouts as required under the 2002 Improper Payments Information Act and the 2010 Improper Payments Elimination and Recovery Act.

“By not performing a risk assessment as required by IPERA, DoD did not reap the associated benefits, including the ability to better identify root causes and develop a comprehensive and effective corrective action plan to reduce improper payments, the audit said. “DoD’s lack of a detailed and effective corrective action plan also made it difficult for department officials to monitor and measure the extent of progress made to remediate causes, hold individuals responsible for implementing corrective actions, or communicate to DoD leadership and other key stakeholders the extent of the department’s progress in remediating the causes of improper payments.”

Keep reading this article at: http://www.govexec.com/management/2013/06/pentagon-still-doesnt-have-grasp-improper-payments-auditors-find/64490/?oref=govexec_today_nl 

Filed Under: Government Contracting News Tagged With: contract payments, DoD, GAO, improper payment, IRS, OMB, overpayment

April 30, 2012 By AMK

OMB ups the ante on improper contractor payments

Federal agencies will have to start thinking about how to use a new online portal that aims to prevent billions of dollars from being wasted on improper payments.

An April 12 memo from the Office of Management and Budget directs all agencies to create framework for using the “Do Not Pay” list for pre-payment eligibility reviews. The list brings together several databases into one “check point” and uses analytics to identify and stop wasteful errors before they occur. The tool is already in use at the Treasury Department, the Government Printing Office, and the National Archives Records Administration.

Agencies are required to submit their proposals to OMB by June 30, 2012. Final plans are due to OMB by Aug. 31, 2012, and will consist of two parts: The first outlines the agency’s commitment to enroll with the Do Not Pay list to reduce improper payments, and the second portion addresses how an agency integrates the list into current business practices.

The departments of Labor, Agriculture and Veterans Affairs and the Small Business Administration are expected to start using the tool in the upcoming months. By spring 2013, all major federal agencies will use Do Not Pay to reduce waste.

Although the White House said the number of improper payments decreased in fiscal 2011 compared to 2010, several inspector general reports show that many agencies, including the Internal Revenue Service, Social Security Administration and Homeland Security Department, continue to struggle with recovering and reporting erroneous payments.

With the release of the OMB memo, the White House also announced agencies have exceeded President Barack Obama’s 2010 goal to recover $2 billion in overpayments to contractors by the end of this fiscal year. The administration surpassed that milestone nearly six months ahead of schedule, mostly due to recovering hundreds of millions of dollars from the Medicare Fee-for-Service Recovery Audit Contractor program.

About the Author: Camille Tuutti is a staff writer covering federal IT and the federal workforce for Federal Computer Week.  This article appeared on Apr. 12, 2012 at http://fcw.com/articles/2012/04/12/omb-memo-do-not-pay-list.aspx?s=fcwdaily_130412.

Filed Under: Government Contracting News Tagged With: contract payments, OMB, overpayment

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