U.S. General Services Administration Administrator's Semiannual Management Report to the Congress Report No.51 April 1, 2014 to September 30, 2014 U.S. General Services Administration Daniel M. Tangherlini Administrator Office of Administrative Services Cynthia A. Metzler Chief Administrative Services Officer GAO/IG Audit Response Branch Brenda Parson Branch Chief September 2014 This report is in the public domain. Authorization to reproduce it in whole or in part is granted. While permission to reprint this publication is not necessary, the citation should be: U.S. General Services Administration, Office of Administrative Services, GAO/IG Audit Response Branch, Administrator's Semiannual Management Report to Congress, No. 51, Washington, DC 20405. To obtain copies of this report, Write to: U.S. General Services Administration, Office of Administrative Services, GAO/IG Audit Response Branch, 1800 F ST, NW Washington, DC 20405 E-mail your request to: brenda.parson@gsa.gov Call in your request: (202) 501-1781 Obtain a copy of this report on the Agency's Web site at: Administrator’s Semiannual Management Report to the Congress Contents Synopsis of Audit Activity 4 Overview 5 Organization of Audit Follow-up Program 6 Agency Audit Follow-up Program 6 Agency Audit Follow-up Official 6 The Chief Administrative Services Officer 6 Heads of Services and Staff Offices and Regional Administrators 6 Audits with Disallowed Costs 7 Audits with Better Use Funds 8 Internal Audits 9 Audits under Appeal/Litigation 10 Contract Audits 12 Glossary of Terms 27 Appendix A 29 Synopsis of Audit Activity In accordance with the Inspector General Act of 1978, as amended, the Administrator is required to report directly to the Congress on management decisions and final actions taken on audit recommendations made by the Office of Inspector General (OIG) of the General Services Administration (GSA). This report covers the semiannual management reporting period of April 1, 2014, through September 30, 2014. The report provides a summary of: - Cases where final action has not been taken on audits one year after the date of the management decision. - Implementation of the recommendations by GSA management contained in audit reports issued by the OIG. At the commencement of this semiannual management reporting period, there were audit reports with disallowed costs, audits with better use funds, and audits with both disallowed cost and better use funds. During the reporting period, a total of 177 audit reports were pending final action containing financial recommendations totaling $2,144,912,232. There were 170 contract audits with financial recommendations totaling $2,144,788,464 and 7 internal audits with financial recommendations totaling $123,768. During the reporting period, management decisions were made on 42 audit reports concerning nationwide GSA programs and operations. Of the 42 audits, 13 of these audits found $15,733,592 in pre-award, post-award contracts and internal program spending that was incorrectly charged to the Government (known as disallowed costs). Of the 42 audits, 29 audits recommended that $263,997,152 could be used more efficiently (known as funds to be put to better use) if management took action to implement and complete the OIG recommendations. This information is disclosed in Appendix A of this report. During the six-month period, GSA was able to successfully take final action on a total of 62 audits. These audits represent the recovery of $4,508,153 in Government funds and the identification of $434,728,497 in potential future savings. As of September 30, 2014, 157 audit reports remained open. There are several audits involving claims under appeal or litigation during this reporting period. Overview This report, submitted pursuant to the Inspector General Act of 1978, as amended, presents management's perspective on audit resolution and follow-up activity at GSA for the period beginning April1, 2014, through September 30, 2014. This is the agency's 51st report to the Congress since the implementation of the Act (Public Law 100-504). The data in the report indicates that GSA's audit follow-up efforts continue to play a significant role in the effective management of the agency's operations and the accomplishment of its mission which results in better use of Taxpayer's dollars. U.S. General Services Administration Organization GSA is organized around two major business functions represented by the Federal Acquisition Service and the Public Buildings Service. In addition, GSA houses the Office of Government-wide Policy, the Office of Citizen Services and Innovative Technologies, and a number of Staff Offices that provide support to the other GSA organizations. There are 11 regions in the GSA structure. The Administrator of GSA directs the execution of all GSA functions. Members of his office, as well as Regional Administrators and Heads of Services and Staff Offices, advise and make recommendations on policy or operational issues of national scope. They are also responsible for execution of programs and services within their service, region or staff office, under the leadership of the Administrator. Organization of Audit Follow-Up Program GSA has effective systems in place for keeping track of audit recommendations. In addition, GSA senior management is committed to ensuring that appropriate corrective action is taken. Agency managers have the responsibility to act upon the auditor's recommendations, with the audit resolution process being supervised by the agency audit follow-up official. A description of the responsibilities of GSA officials involved in the audit follow-up process is set forth below: Agency Audit Follow-up Official The Deputy Administrator is the Agency Audit Follow-up Official responsible for audit follow-up activity. As such, she/he has overall responsibility for ensuring the adequacy of the agency's follow-up system, monitoring the resolution of audit recommendations, and ensuring the prompt implementation of corrective actions. She/he also makes final decisions to resolve differences between agency management and the OIG. The Chief Administrative Services Officer (CASO) The CASO provides direction and oversight to the officials in the Office of Administrative Services (OAS) who manage the GSA's Audit Resolution and Follow-up System. Their responsibilities include: - Acting as the liaison with the Government Accountability Office (GAO) for the coordination of GAO audits in progress within GSA and for preparation of responses and reports for the signature of the Administrator on GAO recommendations as required by law; - Ensuring timely resolution and implementation of internal and external audit recommendations made by the GAO and the OIG; - Overseeing the collection and proper accounting of monetary amounts determined due to the Government as the result of audit-related claims; - Analyzing GSA's programs, upon request from the Administrator, particularly as related to past or present audit recommendations; and, - Maintaining an automated report control system for both internal and external audits that provides an accurate means for tracking and documenting actions taken in implementing audit recommendations. Heads of Services and Staff Offices and Regional Administrators Heads of Services and Staff Offices and Regional Administrators, to whom audit recommendations pertain, have primary responsibility for resolving and implementing recommendations promptly. Their responsibilities include: - Ensuring controls are implemented to provide timely, accurate, and complete responses to audit reports; - Developing, advocating, and documenting agency positions on audit recommendations; - Preparing responses for GAO draft reports and transmittals for final GAO reports in coordination with OAS; - Providing comments on audit decision papers prepared by the OIG to ensure that management's position on unresolved audit recommendations is properly stated. Audits with Disallowed Costs Final action for the six-month period Ending SEPTEMBER 30, 2014 A. Audit reports for which final action had not been taken by the commencement of the reporting period. B. Audit reports on which GSA/OIG management decisions were made during the reporting period. Number of Audit Reports 70 13 Disallowed Costs $53,021,557 $15,733,592 C. Audit reports on which final action was taken during the reporting period. (i) the dollar value of disallowed costs - collections. $1,575,295 - offset ................... $0 - property in lieu of $0 cash... - surplus ............... $0 - other ............... $569,410 (ii) the dollar value of disallowed costs that were written off by management. 13 $4,508,153 $2,144,705 $2,363,448 D. Audit reports for which no final action has been taken by the end of the reporting period. 70 $64,246,996 Audits with Better Use Funds Final action for the six-month Number of Audit No budget Impact Budget Ending SEPTEMBER 30, 2014 Reports (Actual and Estimated) Impact A. Audit reports for which final 107 $2,091,890,675 $0 action had not been taken by the commencement of the reporting B. Audit reports on which 29 $263,997,152 $0 GSA/OIG management decisions were made during the reporting period. C. Audit reports on which final 49 $434,728,497 $0 action was taken during the reporting period. (i) the actual dollar value of $11,647,374 $0 recommendations that were actually completed. (ii) the actual dollar value of $11,332,442 $0 recommendations that management has subsequently concluded should not or could not be implemented or completed. (iii) the actual dollar value of 0 $0 recommendations that management has subsequently concluded should not or could not be determined (calculated). (iv) the estimated dollar value of $434,413,565 $0 ''funds to be put to better use'' as agreed to by GSA management and the OIG. D. Audit reports for which no final 87 $1,921,159,330 $0 action has been taken by the end of the reporting period. Internal Audits Audits with Management Decisions made prior to September 30, 2013, but with Final Action not taken as of September 30, 2014 REPORT NUMBER TITLE OF REPORT DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION PROJECTED COMPLETION DATE Disallowed Costs Better Use Funds A090172PRR11013 Recovery Act Report - GT "Mickey" Leland Federal Building Renovation Project: Construction Contract Audit of PBS's Major Construction and Modernization Projects Funded by The American Recovery and Reinvestment Act of 2009 08/19/2011 $0 $0 Audit is in the implementation stage 12/31/2014 A110100Q9P12009 Audit of Management Controls Within the Network Services Division Pacific Rim Region, Federal Acquisition Service 05/30/2012 $0 $0 Audit is in the implementation stage 03/31/2015 A110095QFP11008 FY 2011 Office of Inspector General Information Technology Security Audit of the SmartPay 09/30/2011 $0 $0 Audit is in the implementation stage 01/15/2015 A090184PRR12008 Recovery Act Report - Contract Administration for Group 10 Review of PBS's Limited Scope and Small Construction Projects Funded by the American Recovery and Reinvestment Act of 2009 04/09/2014 $0 $0 Audit is under implementation review. Corrective action plan pending. 09/30/2014 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS Disallowed Costs Better Use Funds A100213P9X11023 Cobb Mechanical Contractors, Colorado Springs, CO 01/27/2011 $0 $4,864,953 A110070P9X11058 Bergelectric Corporation 06/01/2011 $0 $2,828,737 A100170P9X11077 Caddell Construction Company, Incorporated 07/27/2011 $0 $5,948,364 A110021P9X11093 Myrex Industries 09/08/2011 $0 $5,773,586 A110178Q3X12014 Sharp Electronics Corporation 12/22/2011 $49,653 $6,752,403 A120065P9X12019 Bergelectric Corporation 02/03/2012 $0 $322,910 A120070P9X12029 Cobb Mechanical Contractors 03/28/2012 $0 $194,480 A120069P9X12039 Cleveland Construction, Inc. 05/09/2012 $0 $1,207,623 A120063P9X12055 Caddell Construction Co., Inc. 08/09/2012 $0 $7,975,645 A120121P9X12064 Alutiiq International Solutions, LLC 09/18/2012 $0 $1,692,286 A100148P9X10087 Alutiiq International Solutions, LLC 09/16/2010 $0 $4,096,596 A110147Q6X13010 Xerox Corporation 12/06/2012 $0 $8,511,087 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS Disallowed Costs Better Use Funds A130093P4X14045 Amthor Steel, Inc. 06/26/2014 $0 $2,065,356 A090112Q6X11060 ITS Services, Inc. 06/07/2011 $21,927,117 $0 A110088Q3X11079 Global Protection USA, Inc. 07/28/2011 $29,337 $0 11 Contract Audits Audits with Management Decisions made prior to September 30, 2013, but with Final Action not taken as of September 30, 2014 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A090192Q2X11015 SHI International Corporation 11/24/2010 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A100193Q4X11014 The Stratix Corporation 11/24/2010 $41,168 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A100213P9X11023 Cobb Mechanical Contractors, Colorado Springs, CO 01/27/2011 $0 $4,864,953 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A120104Q2X13057 International Paper Company dba Xpedx 07/22/2013 $52,616 $167,493 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A130056Q3X13048 DHA Group, Inc. 06/12/2013 $237,045 $9,240,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A130093P4X14045 Amthor Steel, Inc. 06/26/2014 $0 $2,065,356 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process 12 REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A100075Q7X11022 Cort Business Services Corporation 01/27/2011 $0 $1,575,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A100114Q2X11036 Ahura Scientific, Inc. 03/29/2011 $123,252 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A100171P9X11025 Layton Construction Company, Inc. 02/02/2011 $0 $1,899,985 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110063QAX11053 IntelliDyne, LLC 05/16/2011 $3,948,160 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110070P9X11058 Bergelectric Corporation 06/01/2011 $0 $2,828,737 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A110087Q3X11057 National Interest Security Company, LLC 06/01/2011 $649,465 $5,728,148 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110108Q4X11063 Protective Products Enterprises 06/13/2011 $0 $553,510 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A080136Q2X09028 Dynamic Decisions, Inc. 01/20/2009 $0 $0 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A110132PRX11067 R.A. Heintges & Associates 07/08/2011 $0 $95,839 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110132PRX11068 Smith-Miller & Hawkinson Architects, LLP 07/08/2011 $0 $6,225,926 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110140PAX11071 Architect/Engineering Proposal Lehman Smith McLeish, PLLC, Subcontractor to Smith-Miller & Hawkinson Architects LLP 07/14/2011 $0 $176,478 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090112Q6X11060 ITS Services, Inc 06/07/2011 $21,927,177 $0 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A100140Q5X11070 Veterans Imaging Products, Inc. 07/07/2011 $3,893 $496,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110088Q3X11079 Global Protection USA, Inc. 07/28/2011 $29,337 $0 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A100170P9X11077 Caddell Construction Company, Incorporated 07/27/2011 $0 $5,948,364 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A100119Q6X11081 Noble Sales Co., Inc. 08/03/2011 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110133PAX11080 Architect Engineer Proposal Arup USA, Inc., Subcontractor to Smith-Miller & Hawkinson Architects LLP 08/04/2011 $0 $134,505 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110180P9X11084 RTKL Associates, Inc. 08/15/2011 $0 $412,057 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110111Q7X11086 Thermo Electron North America , LLC 08/19/2011 $0 $249,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090196P2X11087 Bovis Lend Lease LMB, Inc. 08/22/2011 $0 $33,438 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A110136Q3X11088 Konica Minolta Business Solutions U.S.A., Inc. 08/25/2011 $11,599 $35,625,685 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110021P9X11093 Myrex Industries 09/08/2011 $0 $5,773,586 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A110067Q2X11092 Clifton Gunderson, LLP 09/09/2011 $1,374 $1,196,561 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110174Q4X11097 Protective Products Enterprises 09/15/2011 $63,992 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110146P9X11095 White Construction Company 09/12/2011 $0 $829,494 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A100210Q5X12001 Labat-Anderson, Inc. 10/13/2011 $0 $3,200,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110197Q3X12003 KDH Defense Systems, Inc. 11/15/2011 $1,331 $16,781,668 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A110176Q4X12010 Fontaine Trailer Company, Incorporated 12/07/2011 $0 $4,648,519 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090106Q3X09084 Perot Systems Government Services, Inc. 08/19/2009 $34,758 $33,743,210 In the Process of Collection - GSA is in the process of collecting funds owed the government from the contractor A090090Q2X09086 Ezenia!, Inc. 08/21/2009 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110178Q3X12014 Sharp Electronics Corporation 12/22/2011 $49,653 $6,752,403 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A110191QAX12016 Paradigm Technologies, Inc. 12/27/2011 $0 $2,557,773 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110198Q4X12015 Scott Technologies Incorporated 12/27/2011 $24,137 $5,727,277 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110186Q7X12018 BRSI, L.P. 01/23/2012 $0 $7,425,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120065P9X12019 Bergelectric Corporation 02/03/2012 $0 $322,910 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A120075P4X12020 Enola Contracting Services, Inc. 02/08/2012 $0 $121,312 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110089Q2X12021 Quality Software Services, Inc 02/22/2012 $714 $17,652,348 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110097Q7X12024 Dell Marketing, L.P. 03/01/2012 $0 $142,125,280 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120021Q3X12023 Presidio Networked Solutions, Inc. 03/02/2012 $31,878 $2,427,935 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120074Q5X12028 Kimball International, Inc. 03/27/2012 $0 $29,500,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120070P9X12029 Cobb Mechanical Contractors 03/28/2012 $0 $194,480 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A120090Q3X12032 Mine Safety Appliances Company 04/10/2012 $1,511 $3,270,118 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110143Q5X12034 The J. Diamond Group, Inc. 04/12/2012 $8,555 $21,200,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120069P9X12039 Cleveland Construction, Inc. 05/09/2012 $0 $1,207,623 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A110169Q3X12048 Oce North America, Inc. 06/29/2012 $225,180 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120126Q5X12050 Hamilton Products Group, Inc. 07/06/2012 $0 $15,000,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120136P4X12053 Lenex Steel Company 07/17/2012 $0 $834,067 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120063P9X12055 Caddell Construction Co., Inc. 08/09/2012 $0 $7,975,645 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A110209Q6X12057 Propper International Sales, Inc. 08/15/2012 $2,063,375 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120083P9X12059 M.A. Mortenson Company 08/21/2012 $0 $2,814,148 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120061Q5X12060 Schneider Electric USA, Inc. 08/23/2012 $110,209 $15,000,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120121P9X12064 Alutiiq International Solutions, LLC 09/18/2012 $0 $1,692,286 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A090254PCX09097 Greenhorne & O'Mara, Inc. 09/04/2009 $0 $118,000 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A090232PCX09101 Haley & Aldrich, Inc. 09/09/2009 $0 $11,762 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A090234PCX09102 HDR Architecture, Inc. 09/10/2009 $0 $809,387 Price/Settlement Negotiated - Negotiations have been completed between Contracting Officer and contractor A120141P9X12065 Turner Construction Company 09/20/2012 $0 $858,840 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120148P9X13003 Siemens Industries, Inc. 10/17/2012 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090202Q6X10016 Computech, Inc. 11/09/2009 $0 $19,043,879 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090159Q5X10022 RCF Information Systems, Inc. 12/10/2009 $4,459 $522,882 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090145Q5X09082 BTAS, Inc. Beavercreek, OH 08/06/2009 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090140Q6X10081 Systems Research and Applications Corporation 08/24/2010 $392,685 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A100148P9X10087 Alutiiq International Solutions, LLC 09/16/2010 $0 $4,096,596 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A100117QWX11001 Dun & Bradstreet, Inc 10/07/2010 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A090133Q7X11005 SeaArk Marine, Inc. 10/27/2010 $1,130,227 $0 In the Process of Collection - GSA is in the process of collecting funds owed the government from the contractor A110138Q6X13005 United Parcel Service, Inc. 11/05/2012 $0 $1,031,023 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120066Q5X13004 Life Fitness, Inc. 11/02/2012 $0 $29,300,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120071Q2X13002 ICF Z-Tech, Inc. 10/16/2012 $14,580 $166,639 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A120155Q3X13007 Avion Solutions, Inc. 11/21/2012 $0 $4,523,340 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A110147Q6X13010 Xerox Corporation 12/06/2012 $0 $8,511,087 Litigation in Process - The contractor has appealed the Contracting Officer's decision and the audit is now in the litigation process A120078Q4X13009 Computer Sciences Corporation 12/06/2012 $0 $49,455,749 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120165P4X13019 Skanska USA Building, Inc. 01/30/2013 $0 $82,475 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120177Q3X13021 ASI Government, Inc. 02/08/2013 $13,071 $11,541,977 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120098Q2X13025 Dynamics Research Corporation 03/01/2013 $8,973 $6,040,027 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A120178Q3X13026 VT Aepco, Inc. 03/05/2013 $76,352 $38,059,421 Unresolved - Agreement has not been reached between OIG and Contracting Officer on the Decision Record A120109Q7X13030 ICF Macro, Inc. 03/21/2013 $0 $11,456,930 Unresolved - Agreement has not been reached between OIG and Contracting Officer on the Decision Record A120095Q7X13024 Military Personnel Services Corporation 02/28/2013 $87,379 $16,083,715 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120127Q4X13033 General Dynamics Information Technology, Inc. 03/29/2013 $147,371 $48,528,780 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120142QAX13031 Science Applications International Corporation (SAIC) 03/28/2013 $97,020 $280,483,385 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A130051Q3X13037 ANSYS, Inc. 04/19/2013 $0 $13,071,886 Completed/Closed - All actions have been completed in regard to this audit and the audit has been closed. REPORT NUMBER NAME OF CONTRACTOR DATE OF REPORT MANAGEMENT DECISION AMOUNTS REASON FOR NO FINAL ACTION Disallowed Costs Better Use Funds A130034P4X13032 Caddell Construction Co., Inc 03/28/2013 $0 $5,001,544 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A130047P4X13040 Skanska USA Building, Inc. 05/13/2013 $0 $1,189,218 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A130044Q6X13044 Tektronix, Inc. 05/29/2013 $0 $6,200,000 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120113Q2X13046 MSC Industrial Direct Co. 06/03/2013 $2,278 $55,064,975 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120175Q3X13041 STG Inc. 05/22/2013 $0 $0 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A130069Q7X13051 L-3 Communications Vertex Aerospace, LLC 06/28/2013 $248,423 $24,112,597 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor A120152Q6X13054 Herman Miller, Inc. 07/11/2013 $175,056 $20,574,360 In Negotiation - Negotiations are proceeding between Contracting Officer and contractor Glossary of Terms The following definitions, based on the Inspector General Act Amendment of 1988, apply to terms used in this Semiannual Management Report: Questioned Costs. Costs questioned by the OIG as a result of: • an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; • a finding that, at the time of an audit, such cost is not supported by adequate documentation; • a finding that the expenditure of funds for the intended purpose is unnecessary or unreasonable. Disallowed Cost. Questioned costs that GSA management in a management decision sustained or agreed should not be charged to the Government. Recommendation that Funds be Put to Better Use. A recommendation by the OIG that funds could be used more efficiently if management took action to implement and complete the recommendations, including: • reductions in outlays; • de-obligation of funds from programs or operations; • withdrawal of interest subsidy costs on loans or loan guarantees, insurance or bonds; • costs not incurred by implementing recommended improvements related to the operations of the establishment, a contractor or grantee; • avoidance of unnecessary expenditures noted in pre-award reviews of contract or grant agreements; • any other savings that are identified specifically. Management Decision. The evaluation by management of the findings and recommendations included in an audit report and the issuance of a final decision by management and concurrence by the OIG concerning its response to such findings and recommendations, including planned corrective actions to remedy weaknesses identified in the report. Final Action. The completion of all actions that GSA management concluded in its management decision were necessary with respect to the findings and recommendations included in the audit report. In the event that GSA management concluded no action was necessary, final action occurred when the management decision was made. Management Actions - Questioned Costs. The following is a list of the different management actions used by GSA management to resolve questioned costs in an audit report. • Audit reports on which management decisions were made during the period: Data pertaining to the number of audit reports on which management decisions were made during the period and the associated amount of disallowed costs was furnished by the OIG. • Write-offs: For the purposes of this report, write-offs are interpreted to represent the difference between the disallowed cost and the amount successfully recovered. Management Actions - Better Use Funds. The following is a list of the different management actions used by GSA management to resolve the "better use" of funds in an audit report. • Better Use Funds: The figure represents amounts cited as "cost avoidance" and "funds to be put to better use," as agreed to by GSA management and the OIG. Prior to April 1990, no funds were identified by the OIG specifically as "funds to be put to better use," and no management decisions were issued based on the consideration of "better use" of funds. • Budget Impact Funds: Funds identified as "budget impact" involve the obligation process. Audit-related savings of these funds, depending on the particular fund involved, may be available for reprogramming. • No Budget Impact Funds: Funds identified as "no budget impact" are composed of estimated and actual amounts, and do not involve obligated monies, and, therefore, cannot be construed as having a material effect on GSA''s appropriated funds. • Audit reports on which management decisions were made during the period: Data pertaining to the number of audit reports on which management decisions were made during the period and the associated dollar amounts agreed to by management were furnished by the OIG. • Value of recommendations that management concluded should not or could not be calculable: Management was unable to determine the award amounts and "better use funds" implemented since the amount is included in the overall award to the prime contractor and savings could not be determined. Appendix A U.S. General Services Administration 1800 F Street, NW Washington, DC 20405 www.gsa.gov