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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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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

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

  • 1 Assistant Director for Procurement
  • 1 Deputy Assistant Director for Procurement
  • 4 Contracting Officers
  • 2 Contract Specialists
  • 1 Procurement Analyst
  • 1 Contract Program Analyst

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 

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:

  •  a description of the specific goods and services needed
  • the results of market research to identify vendors
  • a cost estimate and documented approval for funding
  • a description of how competition will be obtained throughout the course of the acquisition
  • a source selection plan that establishes the guidelines for the evaluation of proposals received from contractors

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.

The CFPB's 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

  • technical approach, which is the proposed method to provide the required good or service identified in the solicitation
  • key personnel who will accomplish the needed work
  • past performance or previous experience in conducting work similar to what is required
  • plan to include small businesses to complete some of the required work

Based on the results of the evaluation, the contracting officer selects an offeror and awards the contract.

  • 1. As noted in our publicly available work plan, the OIG plans to conduct a follow-up evaluation that will focus on the CFPB's contract management processes.  Return to text
  • 2. Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 1011(a), 124 Stat. 1376, 1964 (2010) (codified at 12 U.S.C. § 5491(a)).  Return to text
  • 3. Legal counsel from the CFPB's Legal Division also assists Office of Procurement staff.  Return to text
  • 4. The $406 million represents the total potential ceiling amounts for CFPB-awarded contracts but does not include agreements with no specified ceilings under which the CFPB may award task orders. The $120 million represents contract obligations resulting from CFPB and ARC staff making awards on behalf of the agency and does not include obligations for interagency agreements or memorandums of understanding. In addition to CFPB- and ARC-awarded contracts, the agency inherited building contracts totaling $38 million from other federal agencies.  Return to text
  • 5. The General Services Administration has established long-term government-wide contracts (with set prices and terms for supplies and services) from which government agencies may order. Agencies also may establish multiple-award contracts when several companies can perform a general type of work.   Return to text