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CFPB Report: 2013-IE-C-004 March 28, 2013

CFPB Contract Solicitation and Selection Processes Facilitate FAR Compliance, but Opportunities Exist to Strengthen Internal Controls

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Finding 1: The CFPB's Contract Solicitation and Selection Processes Facilitate FAR Compliance, but Opportunities Exist to Strengthen Internal Controls

The CFPB established internal processes and procedures to facilitate FAR compliance related to contract solicitation and selection activities, such as performing acquisition planning and market research, providing opportunities for companies to compete for CFPB contracts, and conducting evaluations of contractors. We also found that the CFPB designated a competition advocate, a role required by the FAR to promote competition. Nonetheless, our review of a sample of CFPB contracts identified opportunities to strengthen internal controls. At the time of our review, we could not determine based on documentation provided to us whether the CFPB's competition advocate was fulfilling each of the responsibilities required by the FAR. We believe that developing a policy describing the roles and responsibilities of the competition advocate will provide transparency regarding how the individual executing that role is implementing FAR requirements related to competition.

The CFPB Implemented Internal Controls That Facilitate FAR Compliance

To facilitate FAR compliance in its contract solicitation and selection activities, the CFPB has implemented several internal controls, including those listed in table 1.

Table 1: Examples of CFPB Controls to Facilitate FAR Compliance
FAR citation FAR requirement Corresponding CFPB controls
FAR 7.102(a) (2012)

Market Research and Acquisition Planning

Agencies shall perform acquisition planning and conduct market research in order to promote and provide for . . . full and open competition or competition to the maximum extent practicable, and the selection of appropriate contract type.

  • Acquisition Plan Contents: Acquisition Plan Format—An acquisition plan template that includes sections for market research, competition considerations, and rationale for contract type
  • Procurement Policy: Market Research—A policy that communicates the importance of market research to program officials
FAR 7.103(j) (2012) Approval of Contract Documents The agency shall prescribe procedures for (1) reviewing and approving acquisition plans and revisions to these plans to ensure compliance with FAR requirements, and (2) for certain contract types, ensuring that the plan is approved and signed at least one level above the contracting officer.
  • Procurement Review Threshold Policy—A review policy that communicates various thresholds at which certain contracting actions must receive senior executive and legal review
FAR 4.803(a) (2012) Evidence of Availability of Funds Contract files typically contain documentation evidencing the availability of funds.
  • CFPB Control Cover Sheet—A control sheet that documents senior-level approvals of a potential contracting action, depending on the dollar amount of the contract
  • Investment Review Board—A board that determines whether the agency has available funds to support a pending contracting action above $500,000
FAR 4.801(a)-(b) (2012) Contract File Documentation Contracting offices shall establish files that contain the records of all contractual actions and are sufficient to constitute a complete history of the transaction.
  • Policy for the Office of Procurement Contract Files—A policy for establishing, maintaining, and disposing of CFPB contract files
  • File Checklist—A checklist that identifies documentation required for the contract file and cites applicable FAR sections requiring certain documents

Source: OIG analysis of CFPB documents.

We also found that at the time of our review, the CFPB was using several draft document templates that further facilitated FAR compliance. For example, the templates assisted program officials in documenting (1) a plan to acquire goods and services, (2) the performance goals and standards to be achieved by potential contractors, and (3) the reasoning and justification for an acquisition that limits competition, among other requirements.

In practice, for each contract we reviewed, we found that the CFPB

  • conducted and documented acquisition planning
  • specified the required results from the contract
  • prepared a government cost estimate
  • obtained and documented necessary funding approvals
  • identified and implemented a plan to evaluate proposals to determine which contractor represented the best value to the government
  • evaluated contractor qualifications
  • recorded its selection decision

The CFPB Designated a Competition Advocate as Required by the FAR

The CFPB designated the Deputy Assistant Director for Procurement as the agency's competition advocate. FAR Part 6 requires agencies to establish a competition advocate to promote competition, but does not permit the agency's senior procurement executive to perform the role. Although FAR Part 6 otherwise provides discretion regarding who should be appointed as the advocate and how this person should implement the roles and responsibilities outlined in the FAR,6 a U.S. Government Accountability Office (GAO) report states that a senior-level competition advocate "can be more effective in the role and, by emphasizing the importance of competition to program office staff as well as contracting officers, has the potential to affect competition results."7 Consistent with the best practice identified in the GAO report, we found that the CFPB designated its second-highest procurement executive, the Deputy Assistant Director for Procurement, as the agency's competition advocate.

Although the Deputy Assistant Director for Procurement also initially served as the contracting officer for two early CFPB contracting actions, the FAR did not require the competition advocate's approval of these actions. In addition, the FAR does not exclude contracting officers from performing the competition advocate role, and according to CFPB officials, the Deputy Assistant Director for Procurement no longer has contracting officer responsibilities since the CFPB hired contracting officers in July 2011.

It Is Unclear Whether the Competition Advocate's Activities Were Reported

Although the CFPB designated a competition advocate, we could not determine the extent to which the competition advocate implemented the FAR requirements to (1) prepare and submit an annual report to the agency senior procurement executive describing, among other things, the advocate's activities and new initiatives to increase competition and (2) recommend goals, plans, and a system of organizational accountability for increasing competition. In response to our request for the competition advocate's reports, the CFPB provided its fiscal year 2011 procurement report and referenced its internal monthly procurement reports as another source that provided CFPB competition data. Although these documents reported the CFPB's competition statistics, new outreach strategies to bolster competition, and potential improvement areas regarding competition, they do not mention the competition advocate. Therefore, we could not determine his specific activities, new initiatives, or recommendations. In addition, the fiscal year 2011 procurement report does not identify who authored it and to whom it was submitted.

According to a CFPB official, the procurement team did not prepare a separate policy outlining the CFPB competition advocate's responsibilities because roles and responsibilities are described in the FAR. We believe that the CFPB should document how it is implementing the FAR requirements pertaining to the competition advocate to provide greater transparency and to facilitate FAR compliance.


We recommend that the Assistant Director for Procurement

  1. Develop an internal policy describing how the CFPB implements the FAR requirements pertaining to the agency's competition advocate

Management's Response

The Assistant Director for Procurement concurred with recommendation 1. In his response, the Assistant Director stated that the Office of Procurement takes competition very seriously, and that since the audit was conducted, the office "made progress toward completing a competition policy that will address the role of the competition advocate and the duties required in accordance with the FAR." The Assistant Director indicated that "competition reporting and activities will be explicit and aligned with the role of the competition advocate as defined by the FAR," and that the "Deputy Assistant Director for Procurement shall continue in the advocate role with support from my analyst team and staff assistance in order to carry out required duties," consistent with what we noted in our report as a best practice.

OIG Comment

In our opinion, the actions described by the Assistant Director are appropriate for the recommendation, and we plan to follow up on the Office of Procurement's actions to ensure that the recommendation is fully addressed.

  • 6. FAR 6.501 (2012).  Return to text
  • 7. GAO, Federal Contracting: Opportunities Exist to Increase Competition and Assess Reasons When Only One Offer Is Received, GAO-10-833, July 2010.  Return to text