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The Office of Inspector General (OIG) conducted an evaluation of certain Consumer Financial Protection Bureau (CFPB) procurement activities to assess the internal controls of the CFPB's Office of Procurement.1 Our objective was to determine whether the CFPB established contract solicitation and selection processes that facilitated compliance with applicable rules established by the Federal Acquisition Regulation (FAR), which is the primary set of regulations governing federal agencies' procurement of goods and services.
To answer our objective, we determined the extent to which the CFPB's processes and procedures facilitated compliance with certain FAR rules pertaining to contract solicitation and selection, such as acquisition planning, competition, and contractor evaluation. In addition, to assess whether the CFPB followed its internal controls and complied with specified FAR requirements, we reviewed documentation from a sample of CFPB contracts awarded between October 1, 2010, and December 31, 2011. For additional information regarding our scope and methodology, see appendix A.
The Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB in July 2010 to "regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws."2 The agency initially operated under authorities granted to the Secretary of the Treasury until a CFPB Director was appointed in January 2012. Prior to hiring initial procurement staff in December 2010, the CFPB solely used the Department of the Treasury's Bureau of Public Debt's Administrative Resource Center (ARC) to award contracts on the CFPB's behalf. The CFPB has continued to develop an Office of Procurement; however, the agency plans to continue using the ARC for routine procurements pursuant to an interagency agreement. The CFPB has currently decided to follow the FAR in its entirety on all procurements.
The CFPB's Office of Procurement is responsible for establishing processes to provide goods and services to program officials in CFPB divisions. During our period of review, the CFPB continued to recruit procurement staff. In December 2010, the CFPB hired the Assistant Director for Procurement and the Deputy Assistant Director for Procurement, who represented the CFPB's procurement team until the agency hired a procurement analyst in June 2011 and two contracting officers in July 2011. As of January 2013, the CFPB's Office of Procurement included the following 10 members:3
Through September 2012, the CFPB had awarded $406 million in contracts, of which approximately $120 million had been obligated.4
The CFPB's contract solicitation process begins when a program official identifies a need for goods or services to be obtained through the procurement function. The program official coordinates with the Office of Procurement to develop an acquisition package, which typically includes the following elements that align with FAR requirements:
The contracting officer uses information in the acquisition package to prepare a solicitation, which is the form of communication that, among other things, invites vendors to submit proposals responding to the CFPB's request for goods or services and identifies the criteria the CFPB will use to evaluate each vendor's response.
The FAR prescribes policies and procedures to provide competition in the acquisition process and permits federal agencies to solicit potential contractors in several ways. For example, the CFPB may publicly post a solicitation on which any company may submit a proposal, or the CFPB may solicit proposals from a list of approved government vendors or contract holders.5
A vendor responds to the solicitation by submitting a proposal that the CFPB will evaluate during the contract selection process.
After potential contractors respond to a solicitation, the CFPB conducts an evaluation to determine the proposal that is either the best value to the government based on price and nonprice factors, or the lowest priced that technically meets the contract requirements. In addition, the CFPB's selection process includes steps to determine whether potential contractors are responsible, as required by the FAR. The contracting officer typically serves as the selecting official who identifies the winning contractor. In some cases, the contracting officer receives input from a selection panel comprising multiple stakeholders who evaluate certain components of the proposals.
During an evaluation to identify the proposal that is the best value, the CFPB considers both price and nonprice factors as permitted by the FAR. Since price can be a significant factor in determining the winning proposal, nonprice factors are typically evaluated separately. Nonprice factors include a contractor's
Based on the results of the evaluation, the contracting officer selects an offeror and awards the contract.