Commerce Department Orders Audit on BTOP Contracts; North Florida BTOP Project Suspended

On behalf of NTIA, the Department of Interior’s National Business Center signed a $99 million contract with Booz Allen, according to the memo from Ann Eilers, principal assistant inspector general for audit and evaluation. Additionally, Interior’s Acquisition Service Directorate gave a $5 million task order to ASR Analytics. Adequate management and oversight is vital due to the dollar value and breadth of the contracted services, the memo said. The Inspector General’s office seeks to determine how NTIA ensures the receipt and quality of the goods and services, what specific controls exist to verify invoices and payment processes and how NTIA mitigates risks associated with the time and material contract and task orders. NTIA transferred $10 million to the IG’s office for the purposes of BTOP audits and oversight, NTIA said. Audits are conducted regularly to ensure adequate management and oversight, the agency said. NTIA and the OIG’s ongoing collaboration helps ensure the oversight of BTOP projects, it said. The OIG and Booz Allen didn’t comment before our deadline on Friday.

Former federal officials told us they were not surprised that the Commerce Department had ordered an audit. “This could be nothing,” one said. “It could just be standard good government. … Though it seems to be it’s talking more about the issuance of the contract than it was the execution of the program, though it includes both.” The former official added, “I heard from people at the time that there was enormous pressure to get money out.” It’s “not surprising for the IG to audit a large contract like this,” a second official said. “In fact, it would be surprising if they never did an audit on a $100 million contract. I don’t think you can read anything into that at this point."

Already having spent $7 million of a federal grant, the $30 million Florida BTOP project was supposed to have 3,274 route miles of work completed. Instead, zero miles have been completed, according to a latest progress report. NTIA is closely monitoring the progress, a spokeswoman said. Under a notice from the NTIA, the National Oceanic and Atmospheric Administration, the agency working with NTIA on stimulus oversight, has suspended all funding. Federal regulators in August directed North Florida Broadband Authority, which manages the project, to submit an action plan to improve project management. Specifically, NTIA is concerned that Government Services Group (GSG), which was hired to manage the project, should be designated as a subrecipient. NTIA is also concerned about limited oversight after learning that a GSG employee had access to the Automated Standard Application for Payments (ASAP) and could request funds. After reviewing NFBA’s proposed plan, NTIA determined it didn’t sufficiently address the concerns. NTIA is working with NFBA to address the concerns and to get the project on track, the NTIA spokeswoman said. NTIA is “committed to the rigorous oversight of our broadband grants program to safeguard taxpayer investments and ensure projects deliver timely and lasting benefits to the public,” she said.

Even before the suspension of grants, Rapid Systems, one of the contractors hired to build the network, claimed it’s not being paid for work completed. Robert Sheets, CEO of GSG, said Rapid Systems has turned in inadequate, erroneous and undocumented invoices. It also submitted proposed work authorizations without clear outline of scope or timeliness. These were rejected by GSG, he said.

NFBA will “take whatever appropriate action necessary to address any concerns raised through this process,” said Stephen Fulford, chairman of NFBA. Project delays and variance from the baseline plan are due to engineering changes and project management restructuring, NFBA said. Additionally, delays were incurred awaiting government wage-rate decisions, a waiver request to allow eligibility of long-term commercial tower lease and guidance regarding a route change request, NFBA said. The statement that the project hasn’t deployed any network assets is inaccurate, NFBA said. It claimed some $3,780,000 worth of core network equipment and software has been ordered and some $2,730,000 in equipment has been received. But the authority acknowledged that the majority of the equipment is being stacked and staged awaiting the green light for installation following the release of federal grant funds. NFBA claimed the deployment schedule is on pace to have all core network sites built-out and ready for testing and engineering acceptance before the end of the year. NFBA expects to substantially complete the project by the end of January 2012.