BlueForge Alliance

FINDING 2023-001 Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Program: Federal Agency: Department of Defense (U.S. Navy) Funding Year(s): 10/22/2022 – 9/30/2027 Passthrough Entity: General Dynamics Electric Boat Federal Award: 1000042855 AL Number: 12.RD Criteria: The Federal Acquisition Regulation (FAR) 52.244-5 outlines the following regarding competition: (a) The Contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum practical extent consistent with the objectives and requirements of the contract.

(b) If the Contractor is an approved mentor under the Department of Defense Pilot Mentor-Protégé Program (Pub.L.101-510, section 831 as amended), the Contractor may award subcontracts under this contract on a noncompetitive basis to its protégés. The FAR subpart 6.3 outlines policies and procedures, and identifies authorities, for contracting without providing for full and open competition: (a) 41 U.S.C.3304 and 10 U.S.C. 3204 each authorize, under certain conditions, contracting without providing for full and open competition. The Department of Defense, Coast Guard, and National Aeronautics and Space Administration are subject to “ 10 U.S.C. 3204. Other executive agencies are subject to 41 U.S.C.3304. Contracting without providing for full and open competition or full and open competition after exclusion of sources is a violation of statute, unless permitted by one of the exceptions in 6.302. (b) Each contract awarded without providing for full and open competition shall contain a reference to the specific authority under which it was so awarded. Contracting officers shall use the U.S. Code citation applicable to their agency. (See 6.302.) (c) Contracting without providing for full and open competition shall not be justified on the basis of- (1) A lack of advance planning by the requiring activity; or (2) Concerns related to the amount of funds available (e.g., funds will expire) to the agency or activity for the acquisition of supplies or services. (d) When not providing for full and open competition, the contracting officer shall solicit offers from as many potential sources as is practicable under the circumstances. (e) For contracts under this subpart, the contracting officer shall use the contracting procedures prescribed in 6.102(a) or (b), if appropriate, or any other procedures authorized by this regulation. Per FAR 6.302, the following are circumstances permitting other than full and open competition: 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements. 6.302-2 Unusual and compelling urgency. 6.302-3 Industrial mobilization; engineering, developmental, or research capability; or expert services. 6.302-4 International agreement. 6.302-5 Authorized or required by statute. 6.302-6 National security. 6.302-7 Public interest. In accordance with FAR 9.405 (e)(1) After the opening of bids or receipt of proposals or quotes, the contracting officer shall review the exclusion records in SAM. Condition: During our testing of compliance and controls, we identified the following matters: • For four procurement samples of a total of 15 items sampled, management utilized a single source justification. However, the rationale did not conform to the requirements of FAR 6.302 Circumstances Permitted Other than Full and Open Competition. • For three procurement samples of a total of 15 items sampled, management was not able to provide evidence that they reviewed the exclusion records in sam.gov in accordance with FAR 9.405 (e)(1). Cause: The Entity did not follow its policies and procedures in place to ensure compliance with the requirements of procurement, suspension and debarment. Effect: Failure to perform procurement procedures in accordance with the Entity’s documented policies and Procurement Procedures as outlined in the FAR could result in the procurement being disallowed. Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering into a contract with an entity that is barred from performing work for the Federal government. Context: This is a condition identified based upon our review of the Entity’s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above, for which the questioned costs total $12,604,205. The samples were selected using a non-statistical method. Questioned Costs: $12,604,205 Identification as a Repeat Finding: This is not a repeat finding.

Recommendation: We recommend that the entity follow established policies, procedures, and internal controls to comply with the FAR procurement standards regarding full and open competition when the rationale for vendor selection do not conform to the requirements of FAR 6.302 Circumstances Permitted Other than Full and Open Competition. The entity should also ensure that independent checks for suspension and debarment are completed for all vendor procurements.