Commerce Dept. efficiency savings 'questionable, unsupported, overestimated'

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When a Commerce Department official said they saved $33.1 million through more efficient contracting during fiscal 2010, they were making claims that were "questionable, unsupported, or overestimated," the Commerce Department office of inspector general says.

The OIG makes the assertion--perhaps the closest an official federal report can get to calling colleagues liars--in an Oct. 6 report. The Office of Management and Budget directed agencies in a July 2009 memo (.pdf) to save 3.5 percent of contracting spending in fiscal 2010 and 7 percent in fiscal 2011.

But when auditors examined $23.8 million of the claimed $33.1 million of savings, they found all of the claims to be suspect, the report says.

For example, the Census Bureau--a part of the Commerce Department--said it saved $17.9 million by consolidating its requirement for 1,017 fingerprint scanners needed for the 2010 decennial census.

Census came up with the $17.9 million figure by comparing the $20,610 unit price of a fingerprint scanner listed on GSA Advantage against a quote of $17,613 it had received from a vendor who was giving a volume price break. It then multiplied each figure by 1,017 and subtracted the difference.

"Since Census's own market research found that quantity discounts were routinely available, it is unreasonable to compute savings based on an undiscounted, single-unit list price," the report says.

In any case, the contract baseline against which Commerce measures its savings was incorrect, the report says. Commerce came up with three baselines, settling on an unadjusted one based on spending data from the Commerce office of budget, rather than from the FPDS system, as OMB guidance requires, the report says.

Officials from the office of acquisition management told auditors they couldn't use FPDS data "given a lack of granularity" in it.

For more:
- download the report, OIG-12-011-A (.pdf)

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