Agreed Upon Procedures for Subcontract Number S800654, Prime Contract Number TIRNO-99-D-00001
Reference Number: 2002-1C-194
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.
September 25, 2002
MEMORANDUM FOR DAVID A. GRANT
DIRECTOR OF PROCUREMENT
INTERNAL REVENUE SERVICE
FROM: Michael R. Phillips /s/ Michael R. Phillips
Acting Deputy Inspector General for Audit
SUBJECT: Agreed Upon Procedures for Subcontract Number S800654, Prime Contract Number TIRNO-99-D-00001 (Audit #200210002.032)
In response to your request, the Defense Contract Audit Agency (DCAA) applied agreed-upon procedures to the costs incurred by the subcontractor’s Government Solutions Subcontract Number S800654, under the Prime Contract Number TIRNO-99-D-00001. The purpose of the engagement was to verify the costs incurred from April 1, 1999 to March 31, 2000 under the contract. The report pertains only to the performance of agreed-upon procedures. The DCAA did not perform an examination, and therefore does not express an opinion.
In summary, the DCAA took no exceptions to the subcontractor’s claimed cost of $1,825,063. The subcontractor’s claimed costs are based on the direct costs of those employees who worked on the effort.
However, the DCAA noted that as a result of acquisitions, the subcontractor has stated it expects to realize a cost savings. The DCAA has been unable, at this time, to determine the cost impact of any restructuring activities on the subcontractor’s Corporate, divisional, and segment direct and indirect costs affecting government contracts. Since savings which may be achieved from restructuring activities have not been reflected in projected costs, the DCAA recommends that the contracting office include a downward only savings clause that would adjust the contract for restructuring savings achieved as a result of the acquisitions.
The information in this report should not be used for purposes other than that intended without prior consultation with the Treasury Inspector General for Tax Administration regarding its applicability.
If you have any questions, please contact me at (202) 622-6510 or Daniel R. Devlin, Assistant Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs), at (202) 622-8500.
The Office of Inspector General for Tax Administration has no objection to the release of this report, at the discretion of the contracting officer, to duly authorized representatives of the contractor.
The contractor information contained in this report is proprietary information. The restrictions of 18 USC 1905 must be followed in releasing any information to the public.
This report may not be released without the approval of this office, except to an agency requesting the report for use in negotiating or administering a contract with the contractor.
The TIGTA seal was removed due to its size.