CFPB Report: 2013-IE-C-004 March 28, 2013
Certain CFPB policies and procedures that facilitate FAR compliance in solicitation and selection activities were in draft form at the time of our review. GAO's Standards for Internal Control in the Federal Government states that policies and procedures enforce management's directives. We found that although the Office of Procurement had been conducting procurement activities since October 2010, the CFPB's Policy for Acquisition Planning (acquisition planning policy) and Small Business Review Form had not yet been finalized at the time of our review. In addition, the CFPB was in the process of making revisions to the finalized Procurement Review Threshold Policy (review policy). After we communicated our initial observations to the CFPB, the Office of Procurement issued a final revised review policy, dated October 23, 2012, and a finalized acquisition planning policy, dated October 25, 2012. The Small Business Review Form, which could facilitate compliance regarding small business participation, remained a draft. We believe that finalizing and disseminating the Small Business Review Form will increase the likelihood that the CFPB will be compliant with FAR requirements and management's directives regarding small business competition.
We found that the acquisition planning policy, which includes controls that facilitate FAR compliance for solicitation and selection activities, was a draft at the time of our review. According to the policy, the CFPB considers acquisition planning to be the most critical component of the procurement process. The draft policy included several key document templates, such as an acquisition plan and a source selection plan, to assist program officials in completing the acquisition package. The draft policy included the following controls (also in draft form):
Although we found that CFPB officials had been using a few of these draft control documents in practice, several of the templates continued to evolve during our review period. The CFPB finalized its acquisition planning policy on October 25, 2012.
For the contracts we reviewed, we found that the CFPB documented its legal reviews via e-mails between the legal and procurement staffs and, in some cases, the program staff. The FAR states that documentation related to evidence of legal review is "normally contained" in contract files,8 and the CFPB's review policy requires its Legal Division to review certain documents related to potential contracting actions at or above $500,000. From our review of the above mentioned e-mails, we had difficulty determining whether the CFPB's Legal Division reviewed certain documents for the contracts we sampled. In addition, we determined through our benchmarking research that another federal agency documents legal review using a cover sheet requiring the legal staff's signature. In response to our initial observations, the CFPB revised its review policy to formally document legal approvals using a routing and review slip instead of e-mails.
FAR Part 19 requires agencies to consider small businesses for any acquisition over $150,000, and for acquisitions below that amount, the agency generally must automatically set aside the contract for small business competition.9 In addition, agencies are required to coordinate certain contracting activities with a designated small business specialist. For contracts that required small business consideration, we found that (1) the CFPB coordinated with the Bureau of Public Debt's small business specialist and (2) the contracting officers documented small business considerations for each of the contracts we reviewed, and in some cases, the CFPB specifically awarded contracts to small businesses when certain FAR rules applied.
Nonetheless, to further facilitate compliance, the CFPB has developed a Small Business Review Form that includes controls to help ensure that the small business specialist is involved, when appropriate. Although the CFPB's small business specialist told us in April 2012 that the form would be finalized and rolled out in a month, the form was still in draft as of January 22, 2013.
We recommend that the Assistant Director for Procurement
The Assistant Director for Procurement concurred with recommendation 2. In his response, the Assistant Director noted that the Office of Procurement considers "small business participation in CFPB procurements as a planning priority," and since the audit was conducted, the office has implemented a small business policy as well as a supplemental small business review form. The Assistant Director highlighted that the new policy "standardizes the usage of the review form to ensure coordination with the small business specialist and consideration of small businesses during acquisition planning."
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.
