DoC IG Cites FirstNet for Contracting Control Weaknesses

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The Commerce Department’s Office of Inspector General (OIG) took the First Responder Network Authority (FirstNet) to task in a July 22 report that finds “control weaknesses” in FirstNet’s handling of a $336 million payment it made to its contractor AT&T. Separately, FirstNet said it has taken action to resolve the issue.

FirstNet, with the help of AT&T, is building a nationwide broadband network for public safety organizations, and through February 2019 had spent about $2 billion of the projected $6.5 billion budgeted to fund construction and operation of the network.

According to the OIG, FirstNet made the $336 million payment to AT&T “prior to properly documenting and timely modifying” the underlying contract to move one of 18 contract milestones to a later period. “During the audit, we found that no modification had been executed to address this outstanding milestone or when it will be met,” the report says. It added that the performance period corresponding to the payment ended in March 2018, and “FirstNet had not modified the contract more than a year later.”

Because the contract milestone was not moved to a subsequent period, “the risk that FirstNet will lose track of the milestone increases,” the OIG said. “This could lead to the contractor not accomplishing the milestone within a reasonable time or by the end of contract period. Additionally, due to the complex nature of the program, there continues to be risk that FirstNet will miss other milestones during the remaining 23 years of the contract,” it added.

According to the OIG, FirstNet agreed with its recommendations that the organization’s chief procurement officer move the contract milestone to a future period, and take action to avoid similar situations in the future.

A FirstNet spokesperson told MeriTalk that the organization “has accepted the OIG recommendations and, prior to release of the audit report, the FirstNet Authority executed a contract modification consistent with the OIG’s recommendation.”

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