Inspector General cites FirstNet contracting issues during first year

An audit of FirstNet’s actions during its first 14 months of existence revealed multiple administrative problems in executing government policies and an unidentified board member exerted “undue influence” on a contractor's hiring practices during this period, according to a report released today by the office of the Inspector General (IG) for the U.S. Department of Commerce.

The IG’s office conducted the audit after then-FirstNet Chairman Sam Ginn made the request last fall. At that time, an internal committee of FirstNet board members had just determined that April 2013 allegations from FirstNet board member Paul Fitzgerald that the board was not acting with appropriate openness or transparency were unfounded.

Consideration of Fitzgerald’s other allegations—that some board members may have conflicts of interest and that the hiring of consultants/contractors was not being done appropriately—were given to the IG’s office for its review.

In its audit report, the IG’s office noted that one board member failed to “disclose an interest in a conflicting company,” another filed the form five months late, and that two other board members submitted inaccurate attendance records, “in one case to avoid filing the required public financial disclosure,” a summary of the IG report states.

“All four of these board members continued to engage in decision making, even though they were not in compliance with the financial-disclosure requirements,” the summary states.

Also in the audit report, the IG found that FirstNet’s contracting practices at the time “lacked transparent award competition, sufficient oversight of hiring, adequate monitoring, and procedures to prevent payment of erroneous costs,” according to the report summary.”

Two contracts with small-business contractor Workforce Resources Inc. (WRI) were executed without proper oversight, “resulting in approximately $11 million in unsupported costs to the government,” according to the report summary. The final WRI agreement—awarded in March 2013 for $8.4 million—was awarded on a sole-source basis via the National Institute of Standards and Technology (NIST) based on the notion that the “procurement was unusual, urgent and compelling; that any interruption in services would set FirstNet back six months; and that the cost of the interruption would be significantly high.”

But the IG office disagreed with this assessment, stating in the audit report that there were no specific timeframes that FirstNet needed to meet, based on the law passed by Congress that established FirstNet. Without these timeframes, “FirstNet did not adequately justify how its hiring of consultants under [the final WRI contract] to perform technical planning, business planning, market research, and outreach activities was an urgent matter that was unusual and compelling,” the IG report states.