type: contracts

text:
 Avis juridique important
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 22001D0111(03)
 Απόφαση αριθ. 88/2000, της Μεικτής Επιτροπής του ΕΟΧ της 27ης Οκτωβρίου 2000, για τροποποίηση του παραρτήματος VII (αμοιβαία αναγνώριση των επαγγελματικών τίτλων) της συμφωνίας για τον ΕΟΧ
 Επίσημη Εφημερίδα αριθ. L 007 της 11/01/2001 σ. 0005 - 0008
 Απόφαση της Μεικτής Επιτροπής του ΕΟΧαριθ. 88/2000της 27ης Οκτωβρίου 2000για τροποποίηση του παραρτήματος VII (αμοιβαία αναγνώριση των επαγγελματικών τίτλων) της συμφωνίας για τον ΕΟΧΗ ΜΕΙΚΤΗ ΕΠΙΤΡΟΠΗ ΤΟΥ ΕΟΧ,Έχοντας υπόψη:τη συμφωνία για τον Ευρωπαϊκό Οικονομικό Χώρο, όπως τροποποιήθηκε από το πρωτόκολλο προσαρμογής της συμφωνίας για τον Ευρωπαϊκό Οικονομικό Χώρο, εφεξής καλούμενη "η συμφωνία", και ιδίως το άρθρο 98,Εκτιμώντας τα ακόλουθα:(1) Το παράρτημα VII της συμφωνίας τροποποιήθηκε από την απόφαση αριθ. 190/1999 της Μεικτής Επιτροπής του ΕΟΧ, της 17ης Δεκεμβρίου 1999(1).(2) Πρέπει να ενσωματωθεί στη συμφωνία η οδηγία 1999/42/ΕΚ του Ευρωπαϊκού Κοινοβουλίου και του Συμβουλίου, της 7ης Ιουνίου 1999, για τη θέσπιση συστήματος αναγνώρισης των προσόντων σχετικά με τις επαγγελματικές δραστηριότητες που καλύπτονται από τις οδηγίες ελευθέρωσης, καθώς και μεταβατικών μέτρων, και για τη συμπλήρωση του γενικού συστήματος αναγνώρισης των διπλωμάτων(2).(3) Με την οδηγία 1999/42/ΕΚ του Ευρωπαϊκού Κοινοβουλίου και του Συμβουλίου καταργούνται αρκετές πράξεις που περιλαμβάνονται στη συμφωνία και οι οποίες ως εκ τούτου χρειάζεται να ανακληθούν όσον αφορά τη συμφωνία,ΑΠΟΦΑΣΙΖΕΙ:Άρθρο 1Μετά το σημείο 1α (οδηγία 92/51/ΕΟΚ του Συμβουλίου) του παραρτήματος VII της συμφωνίας προστίθεται το ακόλουθο σημείο:"1β. 399 L 0042: οδηγία 1999/42/ΕΚ του Ευρωπαϊκού Κοινοβουλίου και του Συμβουλίου, της 7ης Ιουνίου 1999, για τη θέσπιση συστήματος αναγνώρισης των προσόντων σχετικά με τις επαγγελματικές δραστηριότητες που καλύπτονται από τις οδηγίες ελευθέρωσης, καθώς και μεταβατικών μέτρων, και για τη συμπλήρωση του γενικού συστήματος αναγνώρισης των διπλωμάτων (ΕΕ L 201 της 31.7.1999, σ. 77).".Άρθρο 2Για τους σκοπούς της παρούσας συμφωνίας, επέρχονται στις διατάξεις της οδηγίας οι ακόλουθες προσαρμογές:Το κείμενο το άρθρου 1 παράγραφος 1 αντικαθίσταται από το ακόλουθο κείμενο:"1. Η παρούσα οδηγία εφαρμόζεται όσον αφορά την εγκατάσταση ή την παροχή υπηρεσιών στον Ευρωπαϊκό Οικονομικό Χώρο από τα κάτωθι φυσικά πρόσωπα και επιχειρήσεις ή εταιρείες (καλούμενα εφεξής 'οι δικαιούχοι') που επιθυμούν να ασκήσουν τις δραστηριότητες που αναφέρονται στο παράρτημα Α:Όσον αφορά την παροχή υπηρεσιών:- υπηκόους κρατών μελών της ΕΚ και κρατών της ΕΖΕΣ, που είναι εγκατεστημένοι στον Ευρωπαϊκό Οικονομικό Χώρο,- εταιρείες ή επιχειρήσεις που έχουν συσταθεί σύμφωνα με τη νομοθεσία κράτους μέλους της ΕΚ ή κράτους της ΕΖΕΣ και έχουν την καταστατική έδρα τους ή την κεντρική διοίκησή τους ή την κύρια επιχειρηματική έδρα τους στον Ευρωπαϊκό Οικονομικό Χώρο, υπό τον όρο ότι, όταν έχουν απλώς την έδρα τους στον Ευρωπαϊκό Οικονομικό Χώρο, από τη δραστηριότητά τους προκύπτει ότι διατηρούν πραγματικούς και διαρκείς δεσμούς με την οικονομία ενός κράτους μέλους της ΕΚ ή κράτους της ΕΖΕΣ· τέτοιο δεσμό δεν μπορεί να αποτελεί η εθνικότητα των μελών της εταιρείας ή της επιχείρησης ούτε των προσώπων που κατέχουν θέσεις διαχείρισης ή εποπτείας σε αυτήν ούτε των κατόχων του κεφαλαίου αυτής,- υπό τον όρο ότι οι υπηρεσίες παρέχονται είτε προσωπικά από το πρόσωπο που έχει συμβληθεί προς τούτο είτε από γραφείο ή υποκατάστημά του εγκατεστημένο στον Ευρωπαϊκό Οικονομικό Χώρο.Όσον αφορά την εγκατάσταση:- υπηκόους κρατών μελών της ΕΚ και των κρατών της ΕΖΕΣ καθώς και εταιρείες ή επιχειρήσεις που έχουν συσταθεί σύμφωνα με τη νομοθεσία κράτους μέλους της ΕΚ ή κράτους της ΕΖΕΣ και έχουν την καταστατική έδρα τους ή την κεντρική διοίκησή τους ή την κύρια επιχειρηματική έδρα τους στον Ευρωπαϊκό Οικονομικό Χώρο, οι οποίοι επιθυμούν να εγκατασταθούν σε κράτος μέλος της ΕΚ ή σε κράτος της ΕΖΕΣ προκειμένου να ασκήσουν δραστηριότητα ως αυτοαπασχολούμενοι και- υπηκόους κρατών μελών της ΕΚ και κρατών της ΕΖΕΣ που είναι εγκατεστημένοι σε κράτος μέλος της ΕΚ ή σε κράτος της ΕΖΕΣ καθώς και εταιρείες ή επιχειρήσεις ως ανωτέρω, υπό τον όρο ότι, όταν έχουν απλώς την καταστατική έδρα τους στον Ευρωπαϊκό Οικονομικό Χώρο, από τη δραστηριότητά τους προκύπτει ότι διατηρούν πραγματικούς και διαρκείς δεσμούς με την οικονομία ενός κράτους μέλους της ΕΚ ή κράτους της ΕΖΕΣ· τέτοιο δεσμό δεν μπορεί να αποτελεί η εθνικότητα των μελών της εταιρείας ή της επιχείρησης ούτε των προσώπων που κατέχουν θέσεις διαχείρισης ή εποπτείας σε αυτήν ούτε των κατόχων του κεφαλαίου αυτής, οι οποίοι επιθυμούν να συστήσουν γραφεία, υποκαταστήματα ή θυγατρικές σε κράτος μέλος της ΕΚ ή σε κράτος της ΕΖΕΣ."Άρθρο 3Διαγράφονται τα κείμενα και οι επικεφαλίδες των ακόλουθων σημείων του παραρτήματος VII της συμφωνίας:- σημείο 20 (οδηγία 64/222/ΕΟΚ του Συμβουλίου),- σημείο 21 (οδηγία 64/223/ΕΟΚ του Συμβουλίου),- σημείο 22 (οδηγία 64/224/ΕΟΚ του Συμβουλίου),- σημείο 23 (οδηγία 68/363/ΕΟΚ του Συμβουλίου),- σημείο 24 (οδηγία 68/364/ΕΟΚ του Συμβουλίου),- σημείο 25 (οδηγία 70/522/ΕΟΚ του Συμβουλίου),- σημείο 26 (οδηγία 70/523/ΕΟΚ του Συμβουλίου),- σημείο 29 (οδηγία 75/369/ΕΟΚ του Συμβουλίου),- σημείο 31 (οδηγία 64/427/ΕΟΚ του Συμβουλίου),- σημείο 32 (οδηγία 64/429/ΕΟΚ του Συμβουλίου),- σημείο 33 (οδηγία 64/428/ΕΟΚ του Συμβουλίου),- σημείο 34 (οδηγία 66/162/ΕΟΚ του Συμβουλίου),- σημείο 35 (οδηγία 68/365/ΕΟΚ του Συμβουλίου),- σημείο 36 (οδηγία 68/366/ΕΟΚ του Συμβουλίου),- σημείο 37 (οδηγία 69/82/ΕΟΚ του Συμβουλίου),- σημείο 38 (οδηγία 82/470/ΕΟΚ του Συμβουλίου),- σημείο 39 (οδηγία 63/607/ΕΟΚ του Συμβουλίου),- σημείο 40 (οδηγία 65/264/ΕΟΚ του Συμβουλίου),- σημείο 41 (οδηγία 68/369/ΕΟΚ του Συμβουλίου),- σημείο 42 (οδηγία 70/451/ΕΟΚ του Συμβουλίου),- σημείο 43 (οδηγία 67/43/ΕΟΚ του Συμβουλίου),- σημείο 44 (οδηγία 68/367/ΕΟΚ του Συμβουλίου),- σημείο 45 (οδηγία 68/368/ΕΟΚ του Συμβουλίου),- σημείο 46 (οδηγία 75/368/ΕΟΚ του Συμβουλίου),- σημείο 47 (οδηγία 82/489/ΕΟΚ του Συμβουλίου),- σημείο 48 (οδηγία 63/261/ΕΟΚ του Συμβουλίου),- σημείο 49 (οδηγία 63/262/ΕΟΚ του Συμβουλίου),- σημείο 50 (οδηγία 65/1/ΕΟΚ του Συμβουλίου),- σημείο 51 (οδηγία 67/530/ΕΟΚ του Συμβουλίου),- σημείο 52 (οδηγία 67/531/ΕΟΚ του Συμβουλίου),- σημείο 53 (οδηγία 67/532/ΕΟΚ του Συμβουλίου),- σημείο 54 (οδηγία 67/654/ΕΟΚ του Συμβουλίου),- σημείο 55 (οδηγία 68/192/ΕΟΚ του Συμβουλίου),- σημείο 56 (οδηγία 68/415/ΕΟΚ του Συμβουλίου),- σημείο 57 (οδηγία 71/18/ΕΟΚ του Συμβουλίου),- σημείο 72 (σύσταση 65/77/ΕΟΚ της Επιτροπής),- σημείο 73 (σύσταση 65/76/ΕΟΚ της Επιτροπής),- σημείο 74 (σύσταση 69/174/ΕΟΚ της Επιτροπής).Άρθρο 4Τα κείμενα της οδηγίας 1999/42/ΕΚ στην ισλανδική και νορβηγική γλώσσα, τα οποία δημοσιεύονται στο συμπλήρωμα ΕΟΧ της Επίσημης Εφημερίδας των Ευρωπαϊκών Κοινοτήτων, είναι αυθεντικά.Άρθρο 5Η παρούσα απόφαση αρχίζει να ισχύει την 28η Οκτωβρίου 2000, υπό την προϋπόθεση ότι έχουν πραγματοποιηθεί προς τη Μεικτή Επιτροπή του ΕΟΧ όλες οι κοινοποιήσεις που προβλέπονται στο άρθρο 103 παράγραφος 1 της συμφωνίας(3).Άρθρο 6Η παρούσα απόφαση δημοσιεύεται στο τμήμα ΕΟΧ και στο συμπλήρωμα ΕΟΧ της Επίσημης Εφημερίδας των Ευρωπαϊκών Κοινοτήτων.Βρυξέλλες, 27 Οκτωβρίου 2000.Για τη Μεικτή Επιτροπή του ΕΟΧΟ ΠρόεδροςG. S. Gunnarsson(1) Δεν έχει δημοσιευθεί ακόμη στην Επίσημη Εφημερίδα.(2) EE L 201 της 31.7.1999, σ. 77.(3) Αναφέρονται συνταγματικές απαιτήσεις.


type: other

jurisdiction: US

text: b" April 10, 2003\n\n\n\n\nAcquisition\nCooperative Agreements Supporting\nthe Mentor Prot\xc3\xa9g\xc3\xa9 Program\n(D-2003-077)\n\n\n\n\n Department of Defense\n Office of the Inspector General\nQuality Integrity Accountability\n\x0c Additional Copies\n\n To obtain additional copies of this report, visit the Web site of the Inspector\n General of the Department of Defense at www.dodig.osd.mil/audit/reports or\n contact the Secondary Reports Distribution Unit of the Audit Followup and\n Technical Support Directorate at (703) 604-8937 (DSN 664-8937) or fax (703)\n 604-8932.\n\n Suggestions for Future Audits\n\n To suggest ideas for or to request future audits, contact the Audit Followup and\n Technical Support Directorate at (703) 604-8940 (DSN 664-8940) or fax\n (703) 604-8932. Ideas and requests can also be mailed to:\n\n OAIG-AUD (ATTN: AFTS Audit Suggestions)\n Inspector General of the Department of Defense\n 400 Army Navy Drive (Room 801)\n Arlington, VA 22202-4704\n\n Defense Hotline\n\n To report fraud, waste, or abuse, contact the Defense Hotline by calling\n (800) 424-9098; by sending an electronic message to Hotline@dodig.osd.mil; or by\n writing to the Defense Hotline, The Pentagon, Washington, DC 20301-1900. The\n identity of each writer and caller is fully protected.\n\n\n\n\nAcronyms\n\nDoDGARs DoD Grant and Agreement Regulations\nFAR Federal Acquisition Regulation\nGAO General Accounting Office\nHBCU/MI Historically Black Colleges and Universities/Minority Institutions\nISO International Organization for Standardization\nMOLIS Minority On-line Information Service\nOSD Office of the Secretary of Defense\nSADBU Small and Disadvantaged Business Utilization\nUNCF United Negro College Fund\nUSAMRAA U.S. Army Medical Research Acquisition Activity\n\x0c\x0c Office of the Inspector General of the Department of Defense\nReport No. D-2003-077 April 10, 2003\n (Project No. D2002CF-0116)\n\n Cooperative Agreements Supporting the Mentor Prot\xc3\xa9g\xc3\xa9 Program\n\n Executive Summary\n\nWho Should Read This Report and Why? Contracting and grants officers that award\ncooperative agreements and Military Department and Defense agency Small and\nDisadvantaged Business Utilization officials that oversee Mentor Prot\xc3\xa9g\xc3\xa9 Program efforts\nshould read this report. The report discusses the inappropriate use of cooperative\nagreements and Mentor Prot\xc3\xa9g\xc3\xa9 Program funds.\n\nBackground. The FY 1991 National Defense Authorization Act, Public Law 101-510,\nestablished the Mentor Prot\xc3\xa9g\xc3\xa9 Program. The purpose of the Program is to encourage\nmajor DoD contractors to assist in improving the capabilities of small disadvantaged\nbusinesses to perform as responsive subcontractors and suppliers. The Office of the\nSecretary of Defense Small and Disadvantaged Business Utilization assists small\ndisadvantaged businesses and coordinates the Mentor Prot\xc3\xa9g\xc3\xa9 Program. The DoD\nMentor Prot\xc3\xa9g\xc3\xa9 Program receives approximately $31 million annually from Congress.\nThe Director, Office of the Secretary of Defense Small and Disadvantaged Business\nUtilization requested that the Inspector General of the Department of Defense audit two\ncooperative agreements entered into under the Mentor Prot\xc3\xa9g\xc3\xa9 Program to determine\nwhether work was performed as specified and whether the work provided value to the\nGovernment.\n\nA cooperative agreement is a legal instrument that is used to form a relationship where\nthe principal purpose is to provide value or assistance to a recipient to carry out a public\npurpose of support or stimulation authorized by a law of the United States. In FY 1998,\nthe Office of the Secretary of Defense Small and Disadvantaged Business Utilization\nentered into cooperative agreements with ScienceWise, Incorporated, cooperative\nagreement DAMD17-98-2-8011 with a final value of $2,887,539, and the United Negro\nCollege Fund, cooperative agreement DAMD17-98-2-8012 with a final value of\n$4,392,036. The U.S. Army Medical Research Acquisition Activity awarded the\ncooperative agreements for the Office of the Secretary of Defense Small and\nDisadvantaged Business Utilization using Mentor Prot\xc3\xa9g\xc3\xa9 Program funds.\n\nResults. The DoD Mentor Prot\xc3\xa9g\xc3\xa9 Program was not properly managed. The U.S. Army\nMedical Research Acquisition Activity disregarded applicable regulations in awarding\ncooperative agreements in support of the Office of the Secretary of Defense Small and\nDisadvantaged Business Utilization when competitive contracts would have been the\ncorrect contract instruments. The cooperative agreements did not contain statements of\nwork with specific performance standards, but rather provided general tasks for the\nsupport of historically black colleges and universities and minority institutions.\nTherefore, there were inadequate means to determine if the Office of the Secretary of\nDefense Small and Disadvantaged Business Utilization obtained the services and\nperformance levels it intended to receive. However, we did determine that the work\nperformed did not relate to the Mentor Prot\xc3\xa9g\xc3\xa9 Program. In addition, the U.S. Army\nMedical Research Acquisition Activity and the Office of the Secretary of Defense Small\n\x0cand Disadvantaged Business Utilization did not exercise sound business practices in\nadministering or overseeing the cooperative agreements. Further, the Office of the\nSecretary of Defense Small and Disadvantaged Business Utilization inappropriately used\nMentor Prot\xc3\xa9g\xc3\xa9 Program funds.\n\nAs a result, potential Antideficiency Act violations may have occurred. Further, an\nassessment of any benefits derived from the monies spent could not be made. The\nU.S. Army Medical Research and Materiel Command needs to review all active\ncooperative agreements to identify any other inappropriate agreements and terminate\nthem and negotiate contracts at the next available option period. Officials should initiate\nappropriate administrative action against U.S. Army Medical Research Acquisition\nActivity personnel responsible for the approval, award, and administration of cooperative\nagreements DAMD17-98-2-8011 and DAMD17-98-2-8012. A command instruction\naddressing cooperative agreement preparation at the U.S. Army Medical Research\nAcquisition Activity would help ensure similar problems do not reoccur. In addition, the\nOffice of the Under Secretary of Defense (Comptroller)/Chief Financial Officer must\ninitiate a preliminary review of potential Antideficiency Act violations. An operating\nbudget should be developed for the Office of the Secretary of Defense Small and\nDisadvantaged Business Utilization. Both the U.S. Army Medical Research Acquisition\nActivity and the Office of the Secretary of Defense Small and Disadvantaged Business\nUtilization need to ensure that management controls exist so that program budgeting and\ncontracting processes are performed correctly. (See the Finding section of the report for\ndetailed recommendations.)\n\nManagement Comments and Audit Response. The Principal Assistant Responsible for\nContracting, U.S. Army Medical Research and Materiel Command concurred with all\nrecommendations directed to the U.S. Army Medical Research and Materiel Command\nand the Director, U.S. Army Medical Research Acquisition Activity except the\nrecommendation to initiate appropriate administrative action against officials responsible\nfor the approval, award, and administration of the cooperative agreements. The Principal\nAssistant argued that, in the instances cited, the law did not require competitive contracts\nand that there was no evidence of intentional misconduct or gross negligence as\npersonnel were executing a request from high-level DoD procurement officials to use\nassistance agreements. We disagree and feel that the contracting officials involved in the\naward of the agreements should have known better. The Principal Assistant also\ncontended that the report stated that cooperative agreements were used when prohibited.\nWe disagree; the report stated that cooperative agreements were used when it was clearly\nin the best interest of the Government to use contracts that would have helped ensure that\nthe Government received specific services that represented adequate value. We request\nthat the U.S. Army Medical Research and Materiel Command reconsider its position and\nprovide additional comments on the final report by June 10, 2003. See the Finding\nsection of the report for a discussion of management comments and the Management\nComments section of the report for the complete text of the comments.\n\nWe provided a draft of this report to the Under Secretary of Defense for Acquisition,\nTechnology, and Logistics; the Under Secretary of Defense (Comptroller)/Chief\nFinancial Officer; and the Director, Office of Small and Disadvantaged Business\nUtilization, Office of the Secretary of Defense on January 15, 2003. As of April 4, 2003,\nwe had not received management comments from those offices. We request that those\noffices provide comments on the final report by June 10, 2003.\n\n\n ii\n\x0cTable of Contents\n\nExecutive Summary i\n\nBackground 1\n\nObjectives 3\n\nFinding\n Mentor Prot\xc3\xa9g\xc3\xa9 Cooperative Agreements 4\n\nAppendixes\n A. Scope and Methodology 22\n Management Control Program Review 23\n Prior Coverage 24\n B. Report Distribution 25\n\nManagement Comments\n U.S. Army Medical Research and Materiel Command 27\n\x0cBackground\n This audit was performed at the request of the current Director of the Office of the\n Secretary of Defense (OSD) Small and Disadvantaged Business Utilization\n (SADBU). The Director requested that we audit two OSD SADBU office\n cooperative agreements to determine whether work was performed as specified in\n the agreements and to determine whether the work provided value to the\n Government. The U.S. Army Medical Research Acquisition Activity\n (USAMRAA) awarded the two cooperative agreements in FY 1998 using Mentor\n Prot\xc3\xa9g\xc3\xa9 Program funds. The cooperative agreements are between the OSD\n SADBU office and ScienceWise, Incorporated (ScienceWise), cooperative\n agreement DAMD17-98-2-8011, and between the OSD SADBU office and the\n United Negro College Fund (UNCF), cooperative agreement\n DAMD17-98-2-8012.\n\n OSD SADBU Office. The OSD SADBU office mission is to enable the\n warfighter to gain access to the efficiency, innovation, and creativity of small\n businesses. The OSD SADBU office is authorized to employ 11 Government\n employees and also has contracted for 10 support staff. The office does not have\n an operating budget beyond receiving funds for payroll and travel, but receives\n approximately $31 million annually in Mentor Prot\xc3\xa9g\xc3\xa9 Program funds and also\n $1 to $2 million annually in Small Business Innovation Research funds. The\n OSD SADBU office supports such programs as the Mentor-Prot\xc3\xa9g\xc3\xa9 Program,\n Small Business Innovation Research and Small Business Technology Transfer,\n Women-Owned Small Businesses, Historically Black Colleges and\n Universities/Minority Institutions (HBCU/MI), Indian Incentive Program, and\n Comprehensive Subcontracting Plan Test Program.\n\n The OSD SADBU office assists numerous small businesses and disadvantaged\n businesses with issues related to DoD procurement. Small disadvantaged\n businesses are those small businesses owned and controlled by socially and\n economically disadvantaged individuals. In addition, the OSD SADBU office\n coordinates the DoD Mentor Prot\xc3\xa9g\xc3\xa9 Program through policy guidance to\n Military Departments and Defense agencies and authorizes the use of Mentor\n Prot\xc3\xa9g\xc3\xa9 Program funds. Each Military Department has a SADBU office that\n reports to the Military Department Secretary; however, each Military\n Department\xe2\x80\x99s SADBU office also coordinates with the OSD SADBU office. The\n OSD SADBU Director reports to the Under Secretary of Defense for Acquisition,\n Technology, and Logistics.\n\n USAMRAA. The USAMRAA mission is to provide high-quality, timely,\n customer-focused contracting guidance and acquisition solutions to the U.S.\n Army Medical Research and Materiel Command. USAMRAA also supports the\n Fort Detrick Garrison and its military tenant activities, Army-wide projects\n sponsored by the Army Surgeon General, and numerous congressionally\n mandated programs, such as the Mentor Prot\xc3\xa9g\xc3\xa9 Program.\n\n Mentor Prot\xc3\xa9g\xc3\xa9 Program. The FY 1991 National Defense Authorization Act\n (Public Law 101-510), section 831, established the Mentor Prot\xc3\xa9g\xc3\xa9 Program. The\n purpose of the Program is to encourage major DoD contractors to assist in\n\n\n 1\n\x0cimproving small disadvantaged businesses\xe2\x80\x99 capabilities to perform as responsive\nsubcontractors and suppliers. The DoD Comptroller provides funds to the OSD\nSADBU office, which provides a portion of the funds to Military Departments\nand Defense agencies. The Mentor Prot\xc3\xa9g\xc3\xa9 Program receives approximately\n$31 million annually, which is used to fund cooperative agreements, the OSD\nSADBU office support contract and other administrative costs, and mentor\nprograms in the Military Departments and Defense agencies.\n\nCooperative Agreements. DoD 3210.6-R, \xe2\x80\x9cDoD Grant and Agreement\nRegulations,\xe2\x80\x9d April 13, 1998 (DoDGARs), which implements the Federal Grant\nand Cooperative Agreement Act, provides DoD guidance for grants and\ncooperative agreements. Prior to April 13, 1998, an interim guidance version of\nDoD 3210.6-R was in effect. DoDGARs defines a cooperative agreement as a\nlegal instrument that is used to enter into a relationship where the principal\npurpose is to provide value or assistance to a recipient to carry out a public\npurpose of support or stimulation authorized by a law of the United States. For\ncooperative agreements, substantial involvement is expected between a DoD\norganization and the recipient. Unlike contracts, the principle purposes of\ncooperative agreements are not for the direct benefit of the Government.\nFurthermore, the DoDGARs regulate cooperative agreements, whereas the\nFederal Acquisition Regulation (FAR) regulates contracts.\n\n Cooperative Agreement DAMD17-98-2-8011. On April 2, 1998,\nUSAMRAA awarded cooperative agreement DAMD17-98-2-8011 for $603,049\nto Federal Information Exchange, Inc., now known as ScienceWise. The purpose\nof the cooperative agreement was to promote the participation of HBCU/MI in\nFederal research, education, and assistance programs, principally through the\nMinority On-line Information Service (MOLIS), a database containing the\ncapabilities of the HBCU/MI and faculty profiles. An HBCU is a historically\nblack college or university that was established prior to 1964, is accredited, and\nwhose principal mission was, and is, the education of African Americans. An MI\nis an institution of higher education whose enrollment of a single minority or a\ncombination of minorities exceeds 50 percent of the total enrollment. After a\nbase year, 2 option years, and a 1-year extension, the total value of the\ncooperative agreement reached $2,887,539.\n Cooperative Agreement DAMD17-98-2-8012. On April 30, 1998,\nUSAMRAA awarded cooperative agreement DAMD17-98-2-8012 to UNCF for\n$1,048,434. UNCF is an African-American education assistance organization.\nThe purpose of the cooperative agreement was to offer technical assistance to\nHBCU/MI regarding DoD programs, requirements, procurement procedures, and\nproposal submissions. UNCF planned to provide the technical assistance by\nhosting conferences and workshops at various HBCU/MI located in different\nregions of the country. The cooperative agreement contained a base year and\n3 option years. The total value of the cooperative agreement reached $4,392,036,\nand a 1-year, no-cost extension was exercised at the end of the third option year.\n\n\n\n\n 2\n\x0cObjectives\n Our overall audit objectives were to determine whether the work as specified in\n the agreements was performed and whether the Government received adequate\n value from the work. In addition, we reviewed the legal uses of Mentor Prot\xc3\xa9g\xc3\xa9\n Program funds. We also reviewed management control programs related to the\n overall objective. See Appendix A for a discussion of the audit scope and\n methodology, review of the management control programs, and prior coverage\n related to the objectives.\n\n\n\n\n 3\n\x0c Mentor Prot\xc3\xa9g\xc3\xa9 Cooperative Agreements\n The DoD Mentor Prot\xc3\xa9g\xc3\xa9 Program was not properly managed.\n USAMRAA disregarded applicable regulations in awarding and\n administering cooperative agreements. USAMRAA and the OSD\n SADBU office:\n\n \xe2\x80\xa2 used the Mentor Prot\xc3\xa9g\xc3\xa9 Program to obtain services from\n contractors that were not qualified to participate in the\n Program,\n\n \xe2\x80\xa2 did not follow provisions of either the FAR or the DoDGARs\n and improperly awarded cooperative agreements when\n competitive contracts should have been used to obtain services,\n and\n\n \xe2\x80\xa2 did not exercise sound business judgment in administering or\n overseeing the cooperative agreements.\n\n Both USAMRAA and the OSD SADBU office did not adequately\n administer the agreements because of inadequate management controls.\n As a result, USAMRAA awarded legal instruments with little control over\n public funds and placed the Government at serious risk for lawsuits. In\n addition, the OSD SADBU office used Mentor Prot\xc3\xa9g\xc3\xa9 Program funds\n provided by Congress for efforts unrelated to the Program and violations\n of the Antideficiency Act may have occurred. Also, USAMRAA awarded\n approximately $1 million of Government funds without proper authority,\n the OSD SADBU office denied Mentor Prot\xc3\xa9g\xc3\xa9 Program participants\n approximately $12 million of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds, and a small\n business stated that it was put out of business by the OSD SADBU office.\n\n\nFederal Regulations and Cooperative Agreements\n When the principal purpose of a transaction is the acquisition of services for the\n direct benefit of the Government, a contract shall be used. Contracts, as defined\n by the FAR, are mutually binding relationships obligating the seller to furnish\n supplies or services and the buyer to pay for them. Contracts include various\n types of commitments that obligate the Government to an expenditure of\n appropriated funds and, unless otherwise authorized, are in writing. However,\n contracts do not include grants and cooperative agreements, which are discussed\n in section 63, title 31, United States Code.\n\n DoDGARs 22.305 states that grants officers shall use merit-based, competitive\n procedures to award grants and cooperative agreements in every case where\n required by statute, and to the maximum extent practicable, in all cases where not\n required by statute. DoDGARs 21.220 states that grants officers are responsible\n for ensuring that individual grants and cooperative agreements are used\n effectively in the execution of DoD programs, and are awarded and administered\n in accordance with applicable laws, executive orders, regulations, and DoD\n\n\n 4\n\x0c policies. In addition, section 21.115 states that the head of each DoD Component\n that awards or administers grants and cooperative agreements, or his or her\n designee, is responsible for ensuring compliance with the DoDGARs within that\n DoD Component. DoDGARs 34.18 states that, \xe2\x80\x9cin accordance with 32 CFR\n [Code of Federal Regulations] 22.205(b), grants and cooperative agreements shall\n not provide for the payment of fee or profit to the recipient.\xe2\x80\x9d DoDGARs 34.12\n states that the preferred method of payment is the \xe2\x80\x9creimbursement method.\xe2\x80\x9d The\n \xe2\x80\x9cadvance payment method\xe2\x80\x9d may be used in exceptional circumstances.\n\n ScienceWise Cooperative Agreement. In August 1997, ScienceWise submitted\n an unsolicited proposal that resulted in a total value of $2,067,349 for a\n cooperative agreement with the OSD SADBU office to expand the MOLIS\n HBCU/MI database. USAMRAA awarded cooperative agreement\n DAMD17-98-2-8011 from April 15, 1998, through January 14, 1999, with\n 2 option years.\n\n Under the agreement, ScienceWise maintained MOLIS, a database consisting\n mainly of minority universities. The database included institutional information\n for each university such as a general description, academic programs, degrees,\n accreditation, and research capabilities. MOLIS was used to electronically\n deliver, through e-mail, contract and grant information to HBCU/MI. MOLIS\n could also be used to electronically notify more than 40,000 HBCU/MI faculty\n and administrators about Government contract and grant opportunities. Prior to\n the cooperative agreement, DoD was funding the MOLIS effort through a\n cooperative agreement between ScienceWise and the Department of Energy.\n\n UNCF Cooperative Agreement. In August 1997, UNCF submitted an\n unsolicited proposal that resulted in a total value of $4,411,095 to the OSD\n SADBU office for a cooperative agreement to provide technical assistance to\n HBCU/MI. USAMRAA awarded cooperative agreement DAMD17-98-2-8012\n for $1,048,434 from May 1, 1998, through April 30, 1999, with 3 option years.\n\n Under the agreement, UNCF worked with the OSD SADBU office and HBCU/MI\n to host conferences and workshops that provided information on Government\n grants and contracts available to HBCU/MI. UNCF had received a previous\n contract from DoD to strengthen the capacity of UNCF members to compete for\n DoD grants and contracts. The UNCF DoD Infrastructure Development\n Assistance Program existed to increase HBCU participation in DoD programs.\n The 1997 unsolicited proposal contained similar tasks.\n\n\nMentor Prot\xc3\xa9g\xc3\xa9 Program\n Cooperative agreements, with Mentor Prot\xc3\xa9g\xc3\xa9 Program funding, were awarded to\n contractors that were not eligible as mentors, to develop opportunities for\n institutions of higher learning and nonprofit organizations that were not eligible\n as prot\xc3\xa9g\xc3\xa9s, and for purposes other than furthering the objectives of the Mentor\n Prot\xc3\xa9g\xc3\xa9 Program.\n\n\n\n\n 5\n\x0c Mentor Prot\xc3\xa9g\xc3\xa9 Program Eligibility. As provided by the FY 1991 National\n Defense Authorization Act, section 831, prospective mentor firms must meet\n eligibility requirements in order to furnish assistance to small disadvantaged\n businesses as part of the Mentor Prot\xc3\xa9g\xc3\xa9 Program. To be eligible as mentors,\n during the fiscal year preceding the fiscal year in which the mentor\n firm enters into the agreement, the total amount of the Department of\n Defense contracts awarded such mentor firm and the subcontracts\n awarded such mentor firm under Department of Defense contracts was\n equal to or greater than $100,000,000 . . . .\n\n The prospective prot\xc3\xa9g\xc3\xa9 firms must be small disadvantaged business concerns.\n Mentors and prot\xc3\xa9g\xc3\xa9s enter into mentor prot\xc3\xa9g\xc3\xa9 agreements that include\n developmental programs for the prot\xc3\xa9g\xc3\xa9s, including factors to assess the\n developmental progress of the firms under the Program and the anticipated\n number and types of subcontracts to be awarded to prot\xc3\xa9g\xc3\xa9 firms. The OSD\n SADBU office is responsible for reviewing and approving applications from\n prospective mentor firms.\n\n HBCU/MI Assistance. USAMRAA and the OSD SADBU office awarded\n cooperative agreements to ScienceWise and UNCF for efforts in support of the\n HBCU/MI programs and not the Mentor Prot\xc3\xa9g\xc3\xa9 Program. The HBCU/MI\n program is one of the six programs administered by the SADBU office.\n However, HBCUs and MIs were not eligible as prot\xc3\xa9g\xc3\xa9s, as they were not small\n disadvantaged business concerns, but nonprofit institutions.\xe2\x88\x97 ScienceWise and\n UNCF did not qualify as mentor firms because there was no evidence that either\n met the statutory requirements for becoming a mentor. The statutory purpose of\n the Mentor Prot\xc3\xa9g\xc3\xa9 Program was not met as the cooperative agreements did not\n involve major DoD contractors furnishing assistance to disadvantaged small\n business concerns. In addition, section 831 of the FY 1991 National Defense\n Authorization Act does not provide for cooperative agreements to be used in\n support of the Mentor Prot\xc3\xa9g\xc3\xa9 Program.\n\n\nAward of Cooperative Agreements\n USAMRAA improperly awarded cooperative agreements when competitive\n contracts should have been used to obtain services. Cooperative agreements set\n generalized requirements while contracts usually have specific statements of\n work, require competition, and contain performance measures to evaluate\n contractor performance. The agreements also included provisions that are counter\n to Federal regulations for grants and cooperative agreements. The ScienceWise\n cooperative agreement allowed profit/fee to be included in the agreement under\n the guise of cost of money and increased labor rates, allowed advance payments\n to a for-profit organization without justification, and was extended for an\n additional year without legal authority.\n\n\n \xe2\x88\x97\n Business concerns are defined by the Small Business Administration as small businesses which\n are \xe2\x80\x9corganized for profit.\xe2\x80\x9d\n\n\n\n 6\n\x0cCooperative Agreements Versus Contracts. Prior to contacting USAMRAA,\nofficials from the OSD SADBU office, including the former Director, approached\nat least one other contracting activity, Defense Contracting\nCenter-Washington, D.C. (formerly the Defense Supply Service-Washington).\nThe officials were requesting two cooperative agreements be awarded, one to\nScienceWise for the maintenance of the MOLIS and one to UNCF for technical\nassistance to HBCU/MI. The Defense Contracting Center declined to award the\ncooperative agreements because it did not believe that there was any specific\nstatutory authority to award the cooperative agreements. The Defense\nContracting Center believed contracts were the correct vehicle for obtaining the\nservices. DoD Directive 5335.2, \xe2\x80\x9cDefense Supply Service-Washington,\xe2\x80\x9d April\n21, 1993, states that DoD Components located within the National Capital Region\nshall use the services of Defense Contracting Center-Washington, D.C., to the\nmaximum extent practicable. It appears that the former Director of the OSD\nSADBU office desired cooperative agreements and \xe2\x80\x9cshopped\xe2\x80\x9d for a contracting\nactivity that would award cooperative agreements without regard for the correct\ncontracting vehicle.\n\nThere was no specific statute authorizing the use of those two cooperative\nagreements. Although USAMRAA cited section 2358, title 10, United States\nCode, \xe2\x80\x9cResearch and Development Projects,\xe2\x80\x9d as an authorizing statute, it was not\na proper statutory authority since the cooperative agreements were not for\nresearch and development projects. USAMRAA routinely awarded cooperative\nagreements for medical research in support of the U.S. Army Medical Research\nand Materiel Command and obtained legal approval of the agreements from\nUSAMRAA counsel during the cooperative agreement award process. The\nUSAMRAA cooperative agreement award process included a legal review by the\nJudge Advocate Division. However, the USAMRAA counsel that approved the\ntwo agreements in question stated that in 1998 he had little experience with\ncooperative agreements and should not have approved either the ScienceWise or\nUNCF cooperative agreement.\n\nAccording to the FAR, a contract should be used when the Government is\npurchasing services. The services included in the ScienceWise and UNCF\ncooperative agreements, MOLIS maintenance and HBCU/MI assistance, clearly\nwere functions that could be contracted. Contracts require specific statements of\nwork describing the services required, market research to determine if other\nsources of those services exist, and price negotiations to assure the Government\nreceived fair and reasonable prices. Cooperative agreements do not. The OSD\nSADBU office used unsolicited proposals provided by the contractors instead of\ndeveloping specific statements of work that defined the tasks to be accomplished.\nFAR 2.101 defines an unsolicited proposal as a written proposal for a new or\ninnovative idea that is submitted to an agency on the initiative of the offeror. The\nOSD SADBU office was responsible for determining requirements and\ndeveloping statements of work that could be used in competitive contracting\nprocesses. The cooperative agreements did not contain specific statements of\nwork; therefore, we could not determine if the tasks performed were the tasks that\nthe OSD SADBU office had planned when the cooperative agreements were\nawarded. In addition, the cooperative agreement files did not contain official\njustifications for sole source selections, or certifications that the Government had\npaid a fair and reasonable price for the services obtained.\n\n\n 7\n\x0cA contributing factor to the USAMRAA award of the cooperative agreements was\nthe 2 percent surcharge it receives from non-Fort Detrick commands for\nprocessing and administering cooperative agreements. USAMRAA contracting\nofficials stated that they receive significant income from the 2 percent surcharge,\nwithout which they could not meet payroll requirements for contracting\npersonnel. USAMRAA received approximately $145,592 for awarding and\nadministering the two cooperative agreements. If the Defense Contracting\nCenter-Washington, D.C., had awarded contracts for the ScienceWise and UNCF\nefforts, it is likely that the $145,592 would have been put to better use, there\nwould have been specific statements of work, and there would have been\nincreased assurance that the Government would receive measurable value from\nthe work.\n\n Competition Requirements. Although DoDGARs states that it is DoD\npolicy to maximize competition when awarding cooperative agreements, grant\nofficials at USAMRAA did not attempt to compete the requirement for the\nmaintenance and expansion of the MOLIS when they awarded cooperative\nagreement DAMD17-98-2-8011. However, both USAMRAA and OSD SADBU\nofficials agreed that the requirement could have been competed. No official\ndocumentation existed as to why competition was not used and there was no\nevidence that other contractors had been contacted. The fact that ScienceWise\nsubmitted an unsolicited proposal for the requirement was not a valid justification\nfor the Government to award sole source to ScienceWise. The use of cooperative\nagreement procedures allowed USAMRAA to bypass the requirements of FAR\nSubpart 15.6 pertaining to unsolicited proposals. The ScienceWise unsolicited\nproposal was for continuation of efforts to maintain and expand the MOLIS\ndatabase, not for a new or unique idea. If ScienceWise\xe2\x80\x99s proposal had been\nsubjected to normal FAR procedures, it would have had to be competed or a sole\nsource procurement would have to be documented and justified.\n\n Grant officials at USAMRAA did not attempt to compete the requirement\nfor providing technical assistance to HBCU/MI when they awarded cooperative\nagreement DAMD17-98-2-8012. There are other organizations, including the\nAmerican Indian Higher Education Consortium, the Hispanic Association of\nColleges and Universities, and the National Association for Equal Opportunity\nthat were capable of meeting the requirements of the cooperative agreement. No\ndocumentation existed as to why competition was not used. The fact that UNCF\nsubmitted an unsolicited proposal for the requirement was not justification for the\nGovernment to award sole source to UNCF. There was no reason that the\nOSD SADBU office could not have developed a statement of work to\ncompetitively seek out contractors capable of efforts such as training HBCU/MIs\nin obtaining DoD contracts.\n\n Performance Measures. The OSD SADBU office did not effectively\nreview efforts performed under the cooperative agreements and was unaware that\nScienceWise had not fulfilled all of its proposed efforts. A disadvantage to the\nGovernment for using cooperative agreements versus procurement contracts is\nthat performance measures are normally not required in assistance-type\ninstruments such as cooperative agreements. There were no defined performance\nmeasures for either of the two cooperative agreements and contractor\nperformance was not effectively monitored. For example, the ScienceWise\n\n\n 8\n\x0cproposal included an easily measurable task to expand the MOLIS during the 3\nyears of the cooperative agreement by adding 150 additional HBCU/MI to the\n214 already included, for a total of 364 participating HBCU/MI. However, the\nMOLIS was expanded by only 44 HBCU/MI during the 4-year period\nScienceWise worked on the project. When questioned, the OSD SADBU office\nhad no knowledge of how many HBCU/MI had been added to the MOLIS during\nthe 4 years of the agreement and had no explanation as to why the MOLIS was\nnot expanded by the 150 HBCU/MI as stated in the ScienceWise proposal.\n\n Disregard for the Regulations. In addition to awarding cooperative\nagreements when contracts would have been the proper vehicle, USAMRAA also\ndisregarded Federal regulations relating to the cooperative agreements. On the\nScienceWise cooperative agreement, USAMRAA allowed payments for profit/fee\nand made advance payments without justification in violation of DoDGARs. In\naddition, USAMRAA executed a 1-year extension of the cooperative agreement\nin violation of item 4 of the cooperative agreement, which cited controlling\nadministrative and cost principles of Office of Management and Budget Circular\nNo. A-110, \xe2\x80\x9cUniform Administrative Requirements for Grants and Agreements\nwith Institutions of Higher Education, Hospitals, and Other Non-Profit\nOrganizations,\xe2\x80\x9d revised November 19, 1993, as further amended September 30,\n1999. These are serious violations and the commanding officer of USAMRAA\nshould perform a review and initiate appropriate administrative action against the\nresponsible officials.\n\n Profit/Fee. ScienceWise received over $203,000 of profit/fee during the\n4 years of the cooperative agreement. In FY 1997, ScienceWise delivered an\nunsolicited proposal to the OSD SADBU office. In the unsolicited proposal,\nScienceWise included an 8 percent profit/fee cost. However, when informed by\nUSAMRAA that profit/fee is not an allowable cost in cooperative agreements,\nScienceWise threatened to withdraw its proposal. To avoid losing the 2 percent\nadministrative fee earned on non-Fort Detrick organizations\xe2\x80\x99 cooperative\nagreements that they administer, USAMRAA officials suggested that\nScienceWise revise its proposal to include \xe2\x80\x9ccost of money\xe2\x80\x9d to compensate for the\nloss of profit/fee. Cost of money is an allowable cost. However, the use by\nScienceWise was not documented or justified in the agreements officer\xe2\x80\x99s file. To\nmake up for the balance of profit/fee not covered by the addition of cost of money\nto the agreement, ScienceWise also increased its labor rates. Some of the\nincreased labor rates were reduced in subsequent ScienceWise proposals to levels\nclosely resembling the initial proposed labor rates, thereby giving the appearance\nthat the labor rates were increased on the revised proposal solely to compensate\nfor the loss of profit/fee from the initial proposal.\n\n The proposed profit/fee of 8 percent for the base year, 2 option years, and\nthe 1-year extension would have totaled $206,157 if ScienceWise had been paid\naccording to the initial proposal. However, a total of $203,059 was paid to\nScienceWise for cost of money ($119,189) and increased labor cost ($83,870)\nduring this same period. Therefore, USAMRAA officials knew that DoD\nregulations did not allow profit/fee to be paid to ScienceWise, but circumvented\nthe prohibition by substituting cost of money and labor costs for profit/fee.\n\n\n\n\n 9\n\x0c Payment Methods. Two payment methods are available for cooperative\n agreements between the Government and for-profit organizations: reimbursement\n and advance payments. Under the reimbursement method, the recipient requests\n reimbursement for costs incurred during a time period. Under the advance\n payments method, a DoD Component makes payment to a recipient based upon\n projections of the recipient\xe2\x80\x99s cash needs, or uses a predetermined payment\n schedule when the timing of the recipient\xe2\x80\x99s needs can be determined with\n sufficient accuracy.\n\n ScienceWise was paid quarterly in advance for the services it would be\n providing over the next quarter. According to DoDGARs, the grants officer in\n consultation with the program official must judge that advance payments to\n for-profit organizations are necessary. The rationale for the judgment should be\n documented in the award file. However, USAMRAA officials did not document\n in the award file their rationale for allowing advance payments to ScienceWise, a\n for-profit organization. Their explanation for allowing advance payments was\n that they regularly do so; however, USAMRAA does business mostly with\n nonprofit organizations. Based on the fact that advance payments to for-profit\n organizations should only be allowed in exceptional circumstances, USAMRAA\n officials were negligent in allowing such payments since the reimbursement\n method would have been more advantageous for the Government.\n\n Cooperative Agreement Extension. USAMRAA officials executed a\n 1-year extension of cooperative agreement DAMD17-98-2-8011 in violation of\n Federal regulations. Office of Management and Budget Circular A-110 states that\n a one-time extension of the expiration date of the award of up to 12 months may\n not be initiated if the extension requires additional Federal funds. USAMRAA\n officials violated this regulation by making two modifications to the cooperative\n agreement on September 11, 2000, and February 13, 2001, which resulted in an\n extension for an additional year, from January 15, 2001, through January 14,\n 2002, with an added cost of $750,190. In addition, section 31 of the cooperative\n agreement, \xe2\x80\x9cOption to Extend the Term of the Cooperative Agreement,\xe2\x80\x9d stated\n that the total duration of the agreement, including the exercise of any options,\n should not exceed April 14, 2001. Therefore, USAMRAA officials had no legal\n authority to extend the cooperative agreement beyond April 14, 2001.\n\n\nAdministration of Mentor Prot\xc3\xa9g\xc3\xa9 Cooperative Agreements\n USAMRAA and the OSD SADBU office did not follow sound business practices\n and improperly encouraged ScienceWise to continue performance in the absence\n of a contract or other assistance instrument. USAMRAA and the OSD SADBU\n office improperly allowed ScienceWise to continue performance to the\n company\xe2\x80\x99s detriment. USAMRAA did not designate grant officer representatives\n and the services provided by the cooperative agreement with UNCF were\n duplicative of services provided by other SADBU offices.\n\n Negotiations With ScienceWise. When the time period of the unauthorized final\n extension to the agreement began to expire, USAMRAA and the OSD SADBU\n office began negotiations with ScienceWise to further continue the MOLIS effort.\n\n\n 10\n\x0cIn July 2001, ScienceWise submitted an unsolicited proposal to the OSD SADBU\noffice to continue the effort from January 16, 2002, through January 15, 2003,\nwith 2 additional option years. However, the award of a new contracting\ninstrument was delayed because of disagreement within USAMRAA as to\nwhether a cooperative agreement or procurement contract should be awarded.\nThe USAMRAA legal office nonconcurred with the use of a cooperative\nagreement. However, ScienceWise believed all was going fine and that a new\naward was imminent. A USAMRAA contract specialist was the main\nGovernment point of contact with ScienceWise. The USAMRAA contract\nspecialist inappropriately told ScienceWise that a new contracting instrument\ncould be backdated to cover ScienceWise for efforts expended after the expiration\nof cooperative agreement DAMD17-98-2-8011. The USAMRAA contract\nspecialist stated that there was a good faith agreement between the OSD SADBU\noffice and ScienceWise for continued assistance until the new contracting vehicle\nwas awarded even though the SADBU office has no authority to award contracts\nor assistance agreements. Therefore, ScienceWise continued working on the\nMOLIS through March 8, 2002, after expiration of cooperative agreement\nDAMD17-98-2-8011 on January 14, 2002, in anticipation of being awarded a new\ncooperative agreement. However, the OSD SADBU office ultimately decided not\nto fund the MOLIS effort past January 14, 2002.\n\nScienceWise has an outstanding $95,000 claim against the Government for\nservices provided from January 16, 2002, through March 8, 2002. ScienceWise is\nplanning legal action against the Government to recoup the $95,000 plus costs for\ndamages suffered. According to the former owner of ScienceWise, the $95,000 in\nlost revenue resulted in him selling his business and ceasing all MOLIS\noperations. The consequences of the handling of the situation by the OSD\nSADBU office and USAMRAA are best summed up in two e-mails from the\nformer President and principal owner of ScienceWise to the Director, OSD\nSADBU office:\n . . . in my 30 years of working with the Federal Government in many\n capacities, this has been the worst treatment of a small business and the\n minority community, minority online information service, that I have\n ever seen, heard of or been associated with.\n\n It seems ironic that the Office of Small and Disadvantaged Business\n put a small business out of business.\n\nDesignation of a Grant Officer Representative. USAMRAA did not formally\ndesignate an OSD SADBU office grant officer representative that was instructed\nin the restrictions of a grant officer representative\xe2\x80\x99s authority. Although not\nrequired, USAMRAA grant officials stated that they normally designate grant\nofficer representatives because it is a good business practice. However, no formal\ndesignation of grant officer representatives was made for cooperative agreements\nDAMD17-98-2-8011 and DAMD17-98-2-8012 due to what USAMRAA officials\ndeemed \xe2\x80\x9ca clerical oversight.\xe2\x80\x9d Although OSD SADBU individuals were acting in\nthat capacity, they never received formal written designation from the\nUSAMRAA grants officer and, therefore, had no authority to perform grant\nofficer representative functions. Typically, a grant officer representative would\nbe delegated authority and duties such as:\n\n\n 11\n\x0c \xe2\x80\xa2 coordinating and consulting with the grantee on all programmatic and\n technical matters which may arise in the administration of the grant or\n cooperative agreement;\n\n \xe2\x80\xa2 evaluating project performance to ensure compliance with the grant or\n cooperative agreement terms and conditions; and\n\n \xe2\x80\xa2 receiving and reviewing required grantee reports (progress, financial,\n or other) on behalf of the Government to ensure that they are timely\n and complete.\n\n The written designation would also list the limitations of what the grant officer\n representative could approve and what must be approved by an authorized grants\n officer. Designation letters usually specify that the grant officer representative\n cannot:\n\n \xe2\x80\xa2 modify or alter the grant/cooperative agreement or any of its terms or\n conditions;\n\n \xe2\x80\xa2 waive the Government\xe2\x80\x99s rights with regard to the grantee\xe2\x80\x99s compliance\n with stated grant program or financial requirements or with grant\n terms or conditions; or\n\n \xe2\x80\xa2 approve any actions which would result in increased cost of\n performance.\n\n A formal written designation would have provided the OSD SADBU individuals\n with written guidelines as to their authority and responsibilities, which may have\n helped to avoid some of the problems identified during the audit.\n\n Services Provided. The services provided by the UNCF cooperative agreement\n to HBCU/MI were, in many cases, duplicative of services available through other\n SADBU offices. For example, the Defense Logistics Agency SADBU office\n operates Procurement Technical Assistance Centers, which are available\n throughout the country to assist small businesses in doing business with the\n Government. Although Procurement Technical Assistance Centers are aimed to\n assist businesses, they are available to assist HBCU/MI that want to participate in\n DoD contracting. Many of the technical assistance services provided by UNCF\n can be obtained from Procurement Technical Assistance Centers including\n training in electronic research administration, fundamentals of sponsored\n programs administration, and developing winning proposals.\n\n\nMentor Prot\xc3\xa9g\xc3\xa9 Program Funds\n A potential Antideficiency Act violation may have occurred. The Under\n Secretary of Defense (Comptroller)/Chief Financial Officer should initiate a\n preliminary review of the potential violation. DoD 7000.14-R, \xe2\x80\x9cDoD Financial\n Management Regulation,\xe2\x80\x9d volume 14, March 1998, establishes procedures for\n DoD Components to use in identifying, investigating, reporting, and processing\n\n\n 12\n\x0cviolations of the Antideficiency Act. The OSD SADBU office did not employ\nMentor Prot\xc3\xa9g\xc3\xa9 Program funds according to statute. The OSD SADBU office, in\nthe absence of an operating budget, authorized Mentor Prot\xc3\xa9g\xc3\xa9 Program funds for\nthe cooperative agreements with ScienceWise and UNCF. The use of Mentor\nProt\xc3\xa9g\xc3\xa9 Program funds for the cooperative agreements and for OSD SADBU\noffice support was questionable because the Act does not allow the use of Mentor\nProt\xc3\xa9g\xc3\xa9 Program funds for other programs or purposes. In addition, the existing\naudit trail of financial documents from the OSD SADBU office and the\nWashington Headquarters Service is insufficient to accurately trace the\ndistribution of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds to the Military Departments and\nDefense agencies.\n\nThe OSD SADBU office authorized $7.3 million of Mentor Prot\xc3\xa9g\xc3\xa9 Program\nfunds to support cooperative agreements with ScienceWise and UNCF over the\nlife of the agreements. By using Mentor Prot\xc3\xa9g\xc3\xa9 Program funds for the\ncooperative agreements and other administrative purposes, it denied mentor firms\napproximately $12 million that could have been used to assist in the development\nof prot\xc3\xa9g\xc3\xa9 firms. Instead of applying all of the funds to mentor reimbursements,\nthe OSD SADBU office authorized 42 percent of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds\nfor the cooperative agreements with ScienceWise and UNCF, an OSD SADBU\noffice support contract, and various other OSD SADBU office support expenses.\n\nOther Uses of Mentor Prot\xc3\xa9g\xc3\xa9 Funds. Our review concentrated on the budgets\nof Mentor Prot\xc3\xa9g\xc3\xa9 Program funds from FY 2000 through FY 2002 as older\ndocumentation was insufficient to analyze the purposes for which funds were\nbudgeted or used. In addition to supporting the cooperative agreements, the\nOSD SADBU office authorized FY 2000 through FY 2002 Mentor Prot\xc3\xa9g\xc3\xa9\nProgram funds for mentor reimbursement, an OSD SADBU office support\ncontract, and other OSD SADBU office support. The following figure illustrates\nthe purposes for which the OSD SADBU office authorized FY 2000 through\nFY 2002 Mentor Prot\xc3\xa9g\xc3\xa9 Program funds.\n\n\n\n\n 13\n\x0c UNCF\n ScienceWise\n 4%\n 5%\n Other OSD\n SADBU Office\n Support\n 11%\n\n\n\n\n OSD SADBU\n Mentor Office Support\n Reimbursement Contract\n 58% 22%\n\n\n\n\nUse of Mentor Prot\xc3\xa9g\xc3\xa9 Program Funds (FY 2000 \xe2\x80\x93 FY 2002)\n\n UNCF. As of April 29, 2002, the OSD SADBU office had authorized\n$1.1 million in FY 2000 through FY 2002 Mentor Prot\xc3\xa9g\xc3\xa9 Program funds for the\ncooperative agreement with UNCF. The $1.1 million represented 4 percent of the\ntotal $28.7 million that the OSD SADBU office had authorized.\n\n ScienceWise. As of April 29, 2002, the OSD SADBU office had\nauthorized $1.4 million in FY 2000 through FY 2002 Mentor Prot\xc3\xa9g\xc3\xa9 Program\nfunds for the cooperative agreement with ScienceWise. The $1.4 million\nrepresented 5 percent of the total $28.7 million that the OSD SADBU office had\nauthorized.\n\n Other OSD SADBU Office Support. As of April 29, 2002, the\nOSD SADBU office had authorized $3 million in FY 2000 through FY 2002\nMentor Prot\xc3\xa9g\xc3\xa9 Program funds for various forms of OSD SADBU office support\nin addition to services provided under the annual OSD SADBU office support\ncontract. The $3 million represented 11 percent of the total $28.7 million that the\nOSD SADBU office had authorized. The various OSD SADBU office support\nservices, which included advertising and travel expenses, did not involve mentor\nreimbursements.\n\n OSD SADBU Office Support Contract. As of April 29, 2002, the\nOSD SADBU office had authorized $6.4 million in FY 2000 through FY 2002\nMentor Prot\xc3\xa9g\xc3\xa9 Program funds for the OSD SADBU office support contract. The\noffice support contract was established to obtain professional services and\nsystems in support of the management, implementation, and execution of OSD\nSADBU office programs. Specific tasks to be performed by the contractor\nincluded database management, statistical analysis and reporting, outreach,\n\n\n 14\n\x0c conference and symposia, and program management. The $6.4 million\n represented 22 percent of the total $28.7 million that the OSD SADBU office had\n authorized. Although some tasks included support of the Mentor Prot\xc3\xa9g\xc3\xa9\n Program or efforts with a clear nexus with the Mentor Prot\xc3\xa9g\xc3\xa9 Program, the\n OSD SADBU office support contract did not solely support the Mentor Prot\xc3\xa9g\xc3\xa9\n Program or involve mentor reimbursements.\n\n Mentor Reimbursement. As of April 29, 2002, the OSD SADBU office\n had authorized payments totaling $28.7 million in FY 2000 through FY 2002\n Mentor Prot\xc3\xa9g\xc3\xa9 Program funds. Of the $28.7 million, the OSD SADBU office\n used $16.7 million, or 58 percent, for reimbursing mentors under Military\n Department and Defense agency mentor prot\xc3\xa9g\xc3\xa9 agreements. The OSD SADBU\n office used the remaining $12 million, or 42 percent, for payment of various\n forms of OSD SADBU office support.\n\n Budget Documentation. The OSD SADBU office personnel did not maintain\n sufficient documentation to determine whether the Military Departments and\n Defense agencies received Mentor Prot\xc3\xa9g\xc3\xa9 Program funds as budgeted. The\n OSD SADBU office uses the Washington Headquarters Service to process\n funding documents. However, existing documentation did not facilitate a viable\n comparison between the amount of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds that was\n budgeted for each Military Department or Defense agency and the amount that\n was authorized for mentor reimbursement under Military Department and\n Defense agency mentor prot\xc3\xa9g\xc3\xa9 agreements. For instance, the FY 2000 Mentor\n Prot\xc3\xa9g\xc3\xa9 Program budget stated that the Navy would receive $7.0 million in FY\n 2000 Mentor Prot\xc3\xa9g\xc3\xa9 Program funds for Navy mentor prot\xc3\xa9g\xc3\xa9 agreements. As of\n April 29, 2002, records at the OSD SADBU office and at the Washington\n Headquarters Service appeared to indicate that the Navy had received less than\n $1 million of the budgeted $7.0 million. However, Navy SADBU officials\n reported that, as of July 25, 2002, nearly $5.7 million in FY 2000 Mentor Prot\xc3\xa9g\xc3\xa9\n Program funds was obligated to the Navy and an additional $1.3 million had been\n identified for the Navy. In addition, OSD SADBU office and Washington\n Headquarters Service records could not be used to determine the amount of\n Mentor Prot\xc3\xa9g\xc3\xa9 Program funds that was received by the Army Mentor Prot\xc3\xa9g\xc3\xa9\n Program. The Air Force received its budgeted Mentor Prot\xc3\xa9g\xc3\xa9 Program funds at\n one time each fiscal year, a method that made the funding easily traceable.\n\n\nUSAMRAA and OSD SADBU Office Management Controls\n USAMRAA Management Controls. The management control program at\n USAMRAA did not include the award and administration of cooperative\n agreements as an area of review. Therefore, the management control program\n was inadequate to provide reasonable assurance that DoDGARs and other Federal\n regulations were properly adhered to during the cooperative agreement award and\n administration process. In FY 2001, according to USAMRAA personnel,\n USAMRAA awarded approximately $548 million in grants and cooperative\n agreements. Management controls could have eliminated the grants officer\n violations, which cost the Government close to $1 million, a combination of the\n\n\n\n 15\n\x0c $750,000 cost of the unauthorized year extension and the $203,000 of profit/fee\n paid ScienceWise, and could have prevented the Government from being at risk\n for a $95,000 claim/lawsuit.\n\n The USAMRAA uses standards developed by the International Organization for\n Standardization (ISO) as the basis for its management control program. Those\n standards include eight guiding principles: customer focus, leadership,\n involvement of people, process approach, system approach to management,\n continual improvement, factual approach to decision making, and mutually\n beneficial supplier relationship.\n\n OSD SADBU Office Management Controls. The OSD SADBU officials were\n unaware of any management control program. The lack of a management control\n program contributed to the inappropriate use of cooperative agreements, the\n inadequate administration of the agreements, and the questionable use of Mentor\n Prot\xc3\xa9g\xc3\xa9 Program funds.\n\n\nConclusion\n The OSD SADBU office did not responsibly manage the Mentor Prot\xc3\xa9g\xc3\xa9 Program\n and failed in its stewardship responsibilities for taxpayers\xe2\x80\x99 monies. In addition,\n USAMRAA awarded cooperative agreements, legal devices that give financial\n assistance to organizations performing public services used only when authorized\n by law, to contractors providing services to the Government, which violated\n Federal regulations. The use of cooperative agreements resulted not only in the\n problems that there were no specific statements of work, no performance\n measures, and no certifications of reasonable costs, but also in the lack of controls\n inherent with cooperative agreements. USAMRAA also allowed costs of\n approximately $1 million to be charged to the Government for inappropriate\n profit/fee and an inappropriate extension of performance on a cooperative\n agreement. In addition, from FY 2000 through FY 2002, the OSD SADBU office\n denied Mentor Prot\xc3\xa9g\xc3\xa9 Program participants approximately $12 million of Mentor\n Prot\xc3\xa9g\xc3\xa9 Program funds and may have violated the Antideficiency Act.\n\n\nManagement Comments on the Finding and Audit Response\n U.S. Army Medical Research and Materiel Command Comments. The\n Principal Assistant Responsible for Contracting, U.S. Army Medical Research\n and Materiel Command responded to the draft report finding on Mentor Prot\xc3\xa9g\xc3\xa9\n Cooperative Agreements. The Principal Assistant stated that the draft report only\n briefly addressed the objectives of the audit and concluded that, because there\n were not specific statements of work or certifications in the acquisition files, the\n audit team could not determine whether the work as specified in the agreements\n was performed or whether the Government received adequate value from the\n work. The Principal Assistant noted that the U.S. Army Medical Research and\n\n\n\n\n 16\n\x0cMateriel Command never received any complaints of non-performance or lack of\nvalue, and that the draft report cited no examples of required work that was not\nperformed or that the amount paid was not fair value.\n\nThe Principal Assistant nonconcurred with the draft report comment that\ncooperative agreements do not bring a direct benefit to the Government and stated\nthat there is no prohibition against the Federal government receiving direct\nbenefit for participating in a cooperative agreement. He quoted section 6303, title\n31, United States Code, which states:\n An executive agency shall use a cooperative agreement as the legal\n instrument reflecting a relationship between the United States\n Government and a State, a local government, or other recipient when\n (1) the principal purpose is to transfer a thing of value to the State,\n local government, or other recipient to carry out a public purpose of\n support or stimulation authorized by a law of the United States instead\n of acquiring (by purchase, lease, or barter) property or services for the\n direct benefit or use of the United States Government . . . .\n\nThe Principal Assistant disagreed with the draft report statement that the\nDoDGARs regulate cooperative agreements and the FAR regulates contracts,\nstating that, \xe2\x80\x9cthere is an absolute relationship between the DoDGAR and FAR.\xe2\x80\x9d\nThe Principal Assistant also disagreed with the conclusion that using cooperative\nagreements avoided the requirements of FAR 15.6, stating that, \xe2\x80\x9cthe cooperative\nagreements were written under the authority . . . [of section 2302, title 10, United\nStates Code] and DoDGAR, which have very little to do with the FAR.\xe2\x80\x9d\n\nThe U.S. Army Medical Research and Materiel Command nonconcurred with the\nstatement that USAMRAA improperly awarded cooperative agreements and\ndisagreed with the statement that USAMRAA awarded legal instruments with\nlittle control over public funds, stating that, \xe2\x80\x9cthe cost principles referenced in the\nagreement provide the same level of control as would any contract issued in its\nstead.\xe2\x80\x9d The Principal Assistant argued that competitive contracts were not\nrequired by law and that to fault the contracting activity for selecting cooperative\nagreements and then for an additional error for every difference between\ncooperative agreements and procurement contracts was unfair.\n\nThe Principal Assistant also stated that required exceptional circumstances\nexisted that justified advance payments to ScienceWise. The Principal Assistant\nemphatically denied the allegation that USAMRAA was influenced by receiving a\n2 percent surcharge to administer cooperative agreements and requested that the\nfinal report be amended to delete any such insinuation. The Principal Assistant\nstated that the draft report incorrectly interpreted Office of Management and\nBudget Circular A-110 as prohibiting all contract extensions when it actually only\nprohibits more than one unilateral, no-cost extension.\n\nUSAMRAA nonconcurred that the appointment of a Grant Officer\xe2\x80\x99s\nRepresentative would have resulted in different outcomes resulting from the\nawards of the cooperative agreements stating that there was no requirement to\nappoint a representative in these cases. USAMRAA nonconcurred that lack of\nmanagement controls cost $1 million. The Principal Assistant stated that the draft\n\n\n 17\n\x0creport was incorrect in noting that award and administration of cooperative\nagreements was not an area of review for management controls, stating that\nUSAMRAA is the Army\xe2\x80\x99s only acquisition activity meeting international quality\nstandards.\n\nUSAMRAA nonconcurred with the draft report statement that there was no\nspecific statute authorizing the use of cooperative agreements for the Mentor\nProt\xc3\xa9g\xc3\xa9 Program. The Principal Assistant stated that there was an incorrect\ncitation used in the request for approval for an award of a cooperative agreement,\nstating that the correct citation was section 2302, title 10, United States Code.\n\nAudit Response. At the heart of this report regarding USAMRAA is the question\nof when it is appropriate to use cooperative agreements and competitive contracts.\nAs stated in the draft report, cooperative agreements are used to provide\nassistance to the recipient to carry out a public service. Contracts are mutually\nbinding documents obligating the seller to furnish supplies or services and the\nbuyer to pay for them. When an activity has stewardship responsibilities over\ntaxpayers\xe2\x80\x99 funds, as all contracting activities do, that activity has an obligation to\nuse the contracting vehicle that is in the best interest of the Government. The\npoint of disagreement with the U.S. Army Medical Research and Materiel\nCommand is not that cooperative agreements were used when prohibited, but that\ncooperative agreements were used when it was clearly in the best interest of the\nGovernment to use contracts, thereby ensuring the Government received specific\nservices and that those services represented adequate value.\n\nOur objectives reflected the concerns of the current OSD SADBU Director, who\nrequested this audit. We agree with U.S. Army Medical Research and Materiel\nCommand comments that required specificity of cooperative agreement\nstatements of work are less than those for contracts and that there is no\nrequirement to ensure fair and reasonable prices are paid for services received\nunder cooperative agreements. Therefore, we reiterate that for the services\nreceived through these cooperative agreements, we are not able to determine\nwhether the work was performed or had value equal to the costs to the\nGovernment.\n\nWe revised the final report to read, \xe2\x80\x9cUnlike contracts, the principal purposes of\ncooperative agreements are not for the direct benefit of the Government.\xe2\x80\x9d\nHowever, the mentor prot\xc3\xa9g\xc3\xa9 cooperative agreements were used to acquire, by\npurchase, services for the direct benefit of the Government, which section 6303,\ntitle 31, United States Code does not prohibit, but does state clearly that it is not\nthe reason for which cooperative agreements are to be used. We agree that there\nis a relationship between the DoDGARs and the FAR but disagree that\ncooperative agreements with general statements of work and without certified\nreasonable prices have cost principles with equivalent levels of control to those of\ncompetitive contracts.\n\nIf exceptional circumstances that justified advance payments to ScienceWise\nexisted, there was no documentation of those circumstances in the award file. As\nstated in the draft report, such documentation is required. During the audit,\nUSAMRAA officials stated that the revenue from the 2 percent surcharge was\nnecessary to fund salaries and other expenses of acquisition personnel. The\n\n\n 18\n\x0c USAMRAA reliance on the 2 percent surcharge to meet payroll expenses creates\n an appearance that USAMRAA may unduly accommodate customers to receive\n additional funds. Therefore, the draft report was not revised. The U.S. Army\n Medical Research and Materiel Command\xe2\x80\x99s comments regarding the\n interpretation of Office of Management and Budget Circular A-110 seem to\n suggest that modifications to cooperative agreements are bilateral agreements.\n We do not agree.\n\n Section 2302, title 10, United States Code does not authorize mentor prot\xc3\xa9g\xc3\xa9\n cooperative agreements.\n\n\nRecommendations, Management Comments, and Audit\n Response\n 1. We recommend that the Commanding Officer, U.S. Army Medical\n Research and Materiel Command:\n\n a. Conduct a review of all active cooperative agreements awarded by\n the U.S. Army Medical Research Acquisition Activity to identify agreements\n that provide direct benefit to the Government or should have been awarded\n by contract. If other improper agreements are found, action should be\n initiated to terminate and negotiate a contract at the next available option\n period.\n\n Management Comments. The Principal Assistant Responsible for Contracting,\n U.S. Army Medical Research and Materiel Command concurred, stating that the\n review will be completed in the next 60 days. He commented that the selection of\n procurement versus assistance is a timely issue.\n\n b. Initiate appropriate administrative action against U.S. Army\n Medical Research Acquisition Activity officials responsible for the approval,\n award, and administration of cooperative agreements DAMD17-98-2-8011\n and DAMD17-98-2-8012.\n\n Management Comments. The Principal Assistant Responsible for Contracting,\n U.S. Army Medical Research and Materiel Command nonconcurred, stating that,\n based on the information available, there was no evidence of any intentional\n misconduct or gross negligence. At worst, personnel uncritically, and in good\n faith, accepted the recommendations and executed the requests of very high-level\n DoD officials in the procurement chain, whose correspondence stated that\n assistance agreements were the appropriate instruments.\n\n Audit Response. The U.S. Army Medical Research and Materiel Command\n identified two memorandums from the Deputy Assistant for Procurement, Office\n of the Under Secretary of Defense for Acquisition and Technology dated\n October 6 and October 7, 1997, as critical documents in the acquisition files for\n the cooperative agreements. These high-level DoD official memorandums were\n both addressed to the Director, OSD SADBU, and were forwarded to\n USAMRAA. An OSD SADBU office employee who, in 1997, reported to a\n\n\n 19\n\x0cprevious OSD SADBU Director, not the OSD Director of Procurement Policy,\nsigned those memorandums. Although the letterhead and the signature block on\nthe memorandums might have been misleading to the uninformed, USAMRAA\ncoordination with the OSD SADBU office should have made it obvious that\nUSAMRAA was dealing with an OSD SADBU official, not a DoD procurement\npolicy official. On January 23, 2003, the previous OSD SADBU Director was\nindicted on 12 counts, including bribery and money laundering. The employee\nwho signed the memorandums continued to work for the OSD SADBU office.\n\nDespite any confusion that may have been created by the memorandums,\nUSAMRAA contracting officials should have known better than to award the\nagreements. The services provided under the agreements clearly should have\nbeen contracted; USAMRAA legal counsel stated that a contract would have been\nthe appropriate vehicle. In addition, the requirements under the agreements could\nhave been competed but no documentation existed as to why competition was not\nused. Further, as stated in the report, neither agreement met the requirements of\nthe Mentor Prot\xc3\xa9g\xc3\xa9 Program. We believe that USAMRAA contracting officials\nawarded agreements when their training should have armed them with knowledge\nthat the awards were improper. In holding warrants, USAMRAA contracting\nofficials had a responsibility to use the contractual instruments that were in the\nbest interest of the Government. We request that the U.S. Army Medical\nResearch and Materiel Command reconsider its position and provide additional\ncomments on the final report.\n\n2. We recommend that the Director, U.S. Army Medical Research\nAcquisition Activity:\n\n a. Establish management controls that ensure decisions on contract\nand assistance instruments are reviewed by well-trained, capable personnel\nthroughout the review process, including legal review.\n\nManagement Comments. The Principal Assistant concurred, stating that the\nLegal Office and USAMRAA had entered into a Memorandum of Understanding\nin 2002 to maximize the use of the command\xe2\x80\x99s legal assets. New initiatives\ninclude the creation of a five-lawyer acquisition legal support team, daily on-site\nlegal support, increased legal reviews, and legal education programs for\nUSAMRAA key staffs.\n\n b. Develop a command instruction that addresses when to use\ncooperative agreements and issues that should be addressed within\ncooperative agreements. The instruction should cover the basic\nfundamentals of DoD 3210.6-R, \xe2\x80\x9cDoD Grant and Agreement Regulations,\xe2\x80\x9d\nApril 13, 1998, with particular emphasis on the difference between for-profit\nand nonprofit organizations, competition of cooperative agreements, and\npreferred payment methods.\n\nManagement Comments. The Principal Assistant concurred, stating that the\ncommand instruction had been completed in the spring of 2001. Further,\nUSAMRAA plans to schedule and complete additional cooperative agreement\ntraining for all personnel within the next 60 days.\n\n\n\n 20\n\x0c3. We recommend that the Under Secretary of Defense for Acquisition,\nTechnology, and Logistics ensure funding is budgeted for the operations and\nmaintenance of the Office of Small and Disadvantaged Business Utilization,\nOffice of the Secretary of Defense.\n\n4. We recommend that the Under Secretary of Defense (Comptroller)/Chief\nFinancial Officer initiate a preliminary review to determine whether the\nimproper use of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds resulted in an\nAntideficiency Act or other funding violation in accordance with\nDoD 7000.14-R, \xe2\x80\x9cFinancial Management Regulations.\xe2\x80\x9d\n\n5. We recommend that the Director, Office of Small and Disadvantaged\nBusiness Utilization, Office of the Secretary of Defense:\n\n a. Discontinue use of Mentor Prot\xc3\xa9g\xc3\xa9 Program funds for purposes\nother than mentor reimbursement of costs associated with providing\nassistance to prot\xc3\xa9g\xc3\xa9s.\n\n b. Establish procedures that ensure clear Mentor Prot\xc3\xa9g\xc3\xa9 Program\ndocumentation exists in order to improve oversight of the purposes for which\nMentor Prot\xc3\xa9g\xc3\xa9 Program funds are used.\n\n c. Employ adequate management controls to ensure contracts and\nallocated funds are used and administered appropriately.\n\nManagement Comments. As of March 24, 2003, the Under Secretary of\nDefense for Acquisition, Technology, and Logistics; the Under Secretary of\nDefense (Comptroller)/Chief Financial Officer; and the Director, Office of Small\nand Disadvantaged Business Utilization, Office of the Secretary of Defense had\nnot responded to a draft of this report. We request that the Under Secretary of\nDefense for Acquisition, Technology, and Logistics; the Under Secretary of\nDefense (Comptroller)/Chief Financial Officer; and the Director, Office of Small\nand Disadvantaged Business Utilization, Office of the Secretary of Defense\nprovide comments in response to the final report.\n\n\n\n\n 21\n\x0cAppendix A. Scope and Methodology\n We researched applicable laws, regulations, and directives concerning DoD use of\n contracts, cooperative agreements, and grants. We reviewed cooperative\n agreements DAMD17-98-2-8011 and DAMD17-98-2-8012. We reviewed\n Mentor Prot\xc3\xa9g\xc3\xa9 Program budgeting data from FY 1998 through FY 2002, funding\n authorization documents, and Standard Forms 272, Report of Federal Cash\n Transactions. We evaluated the amount of interaction between the OSD SADBU\n office, ScienceWise, and UNCF.\n\n During our audit, we visited the OSD SADBU office; the Military Department\n and Defense agency SADBU offices; USAMRAA; ScienceWise; UNCF; Office\n of the Under Secretary of Defense for Acquisition, Technology, and Logistics;\n Defense Contracting Command \xe2\x80\x93 Washington; Defense Criminal Investigative\n Service; Washington Headquarters Service; and Office of the Under Secretary of\n Defense (Comptroller)/Chief Financial Officer. We interviewed USAMRAA\n contracting personnel and legal counsel, Directors or Deputy Directors of the\n Military Department and Defense agency SADBU offices, a Defense Criminal\n Investigative Service investigator, and ScienceWise and UNCF personnel.\n\n We addressed cooperative agreements DAMD17-98-2-8011 and\n DAMD17-98-2-8012 and Mentor Prot\xc3\xa9g\xc3\xa9 Program funding from FY 1998 to\n FY 2002. We did not address OSD SADBU office operations other than to\n determine the types of funding used and the OSD SADBU office role in the two\n cooperative agreements. In addition, we did not examine the Military Department\n SADBU offices or Military Department Mentor Prot\xc3\xa9g\xc3\xa9 Programs.\n\n We evaluated the methods USAMRAA used to award two cooperative\n agreements between the OSD SADBU office and ScienceWise,\n DAMD17-98-2-8011, and UNCF, DAMD17-98-2-8012, using Mentor Prot\xc3\xa9g\xc3\xa9\n Program funding. Specifically, we analyzed whether the appropriate contract\n vehicle was used, whether the Government received a benefit from the\n cooperative agreements, and whether Mentor Prot\xc3\xa9g\xc3\xa9 Program funding was\n properly allocated.\n We reviewed ScienceWise and UNCF unsolicited proposals, statements of work,\n annual reports, cost proposals, and budgeted and actual expenses for the UNCF\n conferences. We also reviewed Mentor Prot\xc3\xa9g\xc3\xa9 Program funding data from\n FY 1998 through FY 2002, funding authorization documents, and Standard\n Forms 272, Report of Federal Cash Transactions.\n\n We performed this audit from April 2002 through January 2003 in accordance\n with generally accepted government auditing standards. Accordingly, we\n included tests of management controls considered necessary.\n\n Use of Computer-Processed Data. We did not use computer-processed data to\n perform this audit.\n\n\n\n\n 22\n\x0c General Accounting Office High-Risk Area. The General Accounting Office\n has identified several high-risk areas in DoD. This report provides coverage of\n the DoD Contract Management high-risk area.\n\n\nManagement Control Program Review\n DoD Directive 5010.38, \xe2\x80\x9cManagement Control (MC) Program,\xe2\x80\x9d August 26, 1996,\n and DoD Instruction 5010.40, \xe2\x80\x9cManagement Control (MC) Program Procedures,\xe2\x80\x9d\n August 28, 1996, require DoD organizations to implement a comprehensive\n system of management controls that provides reasonable assurance that programs\n are operating as intended and to evaluate the adequacy of the controls.\n\n Scope of the Review of the Management Control Program. We reviewed the\n USAMRAA ISO 9002 procedures relating to processing cooperative agreements\n and the adequacy of the OSD SADBU office management control procedures\n related to the Mentor Prot\xc3\xa9g\xc3\xa9 Program. We also reviewed management\xe2\x80\x99s\n self-evaluation applications of those controls.\n\n Adequacy of Management Controls. We identified material management\n control weaknesses at USAMRAA and the OSD SADBU office, as defined by\n DoD Instruction 5010.40.\n\n The USAMRAA management controls were inadequate to ensure that\n USAMRAA complied with applicable regulations in awarding and administering\n cooperative agreements. Recommendations 1.a., 2.a., and 2.b., if implemented,\n will correct the identified weaknesses and could result in significant savings for\n USAMRAA in the acquisition of services. A copy of the report will be provided\n to the senior official responsible for management controls in the U.S. Army\n Medical Command.\n\n The lack of OSD SADBU office management controls contributed to the use of\n questionable funding and improper uses of cooperative agreements.\n Recommendations 5.a., 5.b., and 5.c., if implemented, will correct the identified\n weaknesses and restore approximately $4 million to the Mentor Prot\xc3\xa9g\xc3\xa9 Program\n annually. A copy of the report will be provided to the senior official responsible\n for management controls in the Office of the Under Secretary of Defense for\n Acquisition, Technology, and Logistics.\n\n Adequacy of Management\xe2\x80\x99s Self-Evaluations. The USAMRAA officials did\n not identify the procedures for awarding and administering cooperative\n agreements as an assessable unit or as an area to be reviewed under the ISO\n procedures and, therefore, did not identify or report the management control\n weaknesses identified by the audit.\n\n The OSD SADBU office did not have a discernable management control program\n and, therefore, did not identify or report the management control weaknesses\n identified by the audit.\n\n\n\n\n 23\n\x0cPrior Coverage\n During the last 5 years, the General Accounting Office (GAO) issued two reports\n discussing the Mentor Prot\xc3\xa9g\xc3\xa9 Program. Unrestricted GAO reports can be\n accessed over the Internet at http://www.gao.gov.\n\nGeneral Accounting Office\n GAO Report No. GAO-01-767, \xe2\x80\x9cContract Management: Benefits of the DoD\n Mentor-Prot\xc3\xa9g\xc3\xa9 Program Are Not Conclusive,\xe2\x80\x9d July 19, 2001\n GAO Report No. GAO/NSIAD-98-92, \xe2\x80\x9cDefense Contracting: Sufficient,\n Reliable Information on DOD's Mentor-Prot\xc3\xa9g\xc3\xa9 Program Is Unavailable,\xe2\x80\x9d March\n 30, 1998\n\n\n\n\n 24\n\x0cAppendix B. Report Distribution\n\nOffice of the Secretary of Defense\nUnder Secretary of Defense for Acquisition, Technology, and Logistics\n Director, Office of Small and Disadvantaged Business Utilization\nUnder Secretary of Defense (Comptroller)/Chief Financial Officer\n Deputy Chief Financial Officer\n Deputy Comptroller (Program/Budget)\nDirector for Acquisition Initiatives\n\nDepartment of the Army\nAssistant Secretary of the Army (Financial Management and Comptroller)\nAuditor General, Department of the Army\nCommanding Officer, U.S. Army Medical Command\n Commanding Officer, U.S. Army Medical Research and Materiel Command\n Director, U.S. Army Medical Research Acquisition Activity\n\nDepartment of the Navy\nNaval Inspector General\nAuditor General, Department of the Navy\n\nDepartment of the Air Force\nAssistant Secretary of the Air Force (Financial Management and Comptroller)\nAuditor General, Department of the Air Force\n\nOther Defense Organizations\nDirector, Defense Contract Audit Agency\n\nCongressional Committees and Subcommittees, Chairman and\n Ranking Minority Member\nSenate Committee on Appropriations\nSenate Subcommittee on Defense, Committee on Appropriations\nSenate Committee on Armed Services\nSenate Committee on Governmental Affairs\nHouse Committee on Appropriations\nHouse Subcommittee on Defense, Committee on Appropriations\nHouse Committee on Armed Services\nHouse Committee on Government Reform\n\n\n\n 25\n\x0cCongressional Committees and Subcommittees, Chairman and\n Ranking Minority Member (cont\xe2\x80\x99d)\nHouse Subcommittee on Government Efficiency and Financial Management, Committee\n on Government Reform\nHouse Subcommittee on National Security, Emerging Threats, and International\n Relations, Committee on Government Reform\nHouse Subcommittee on Technology, Information Policy, Intergovernmental Relations,\n and the Census, Committee on Government Reform\n\n\n\n\n 26\n\x0cU.S. Army Medical Research and Materiel\nCommand Comments\n\n\n\n\n 27\n\x0c28\n\x0c29\n\x0c30\n\x0c Final Report\n Reference\n\n\n\n\n Revised\n Page 2\n\n\n\n\n31\n\x0c32\n\x0c33\n\x0c34\n\x0c35\n\x0c36\n\x0c37\n\x0c38\n\x0c39\n\x0c40\n\x0c41\n\x0c42\n\x0cTeam Members\nThe Contract Management Directorate, Office of the Assistant Inspector General\nfor Auditing of the Department of Defense prepared this report. Personnel of the\nOffice of the Inspector General of the Department of Defense who contributed to\nthe report are listed below.\n\nRobert K. West\nTerry L. McKinney\nTimothy E. Moore\nSteven I. Case\nCheryl L. Snyder\nDavid P. Goodykoontz\nElizabeth M. Baarlaer\nLisa C. Rose-Pressley\n\x0c"


type: caselaw

jurisdiction: EU

text:
 27.10.2014
 PT
 Jornal Oficial da União Europeia
 C 380/24
 Recurso interposto em 17 de setembro de 2014 por Robert Klar e Francisco Fernandez Fernandez do despacho do Tribunal da Função Pública de 16 de julho de 2014 no processo F-114/13, Klar e Fernandez Fernandez/Comissão
 (Processo T-665/14 P)
 2014/C 380/32
 Língua do processo: francês
 Partes
 Recorrentes: Robert Klar (Grevenmacher, Luxemburgo) e Francisco Fernandez Fernandez (Steinsel, Luxemburgo) (representante: A. Salerno, advogado)
 Outra parte no processo: Comissão Europeia
 Pedidos
 Os recorrentes concluem pedindo que o Tribunal Geral se digne:
 —
 Anular o despacho do Tribunal da Função Pública de 16 de julho de 2014;
 —
 Remeter o processo ao Tribunal da Função Pública para que este se pronuncie quanto ao mérito;
 —
 Condenar a Comissão Europeia no conjunto das despesas do processo.
 Fundamentos e principais argumentos
 Em apoio do seu recurso, os recorrentes invocam um único fundamento, relativo ao facto de o Tribunal da Função Pública ter considerado erradamente que o recurso era manifestamente inadmissível, devido à ausência de um processo pré-contencioso regular, na medida em que a nota da Autoridade Investida do Poder de Nomeação de outubro de 2012 não era, nem quanto aos seus termos, nem quanto ao seu contexto, nem quanto à sua forma, um ato lesivo cuja notificação fizesse correr o prazo para reclamação.


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