Policy: Technology

Big contractors fail to deliver promised services, but EPA paid them anyway

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Watchdog,EPA,Kelly Cohen,Inspectors General,Waste and Fraud,Accountability,CGI Federal,Technology,Lockheed Martin,Internet,Cloud

Environmental Protection Agency officials spent almost $2.2 million for cloud computing services that it never received from two prominent federal contractors, according to a government watchdog's report.

The EPA's Office of Environmental Information made the purchase in 2011 in an attempt to reduce the agency's computing costs and speed up processing.

The first contract was awarded to provide services on "email, calendar, contacts, collaborative document editing and workspaces, Web conferencing, and other collaboration activities," according to the report by the EPA's inspector general.

EPA proceeded with the cloud computing contract without performing a cost-benefit analysis or providing justification for the email transfer. Thus, the agency missed out on an estimated $2.1 million in savings, according to the IG report.

EPA gave Lockheed Martin five months to switch its email system over to the cloud, but later discovered that it would not be possible to do so. Lockheed was then instructed orally to transfer only 30 days' worth of emails — something Lockheed agreed to do, although it violated contract rules.

Even though Lockheed never performed the work, the EPA's contracting officer did not issue a "cure notice" declaring a breach of contract nor did the officer seek to renegotiate the price of the contract based on the actual work done, according to the IG.

"In addition to paying the vendor full price for agreed-to services not performed as specified in the contract, the EPA is incurring additional costs for maintaining emails not migrated to the cloud," the IG found.

The EPA also paid for services from CGI Inc. to provide "infrastructure-as-a-service" access to EPA clients.

However, the EPA's information office failed to determine if the contract was even necessary, the IG said. The contract, which did not meet federal requirements, cost a little more than $74,000.

"Improvements in documented processes for cloud implementation can minimize the waste of money and resources" and ensure the EPA complies with federal laws, the IG said.

CGI is a Canadian company whose U.S. subsidiary gained notoriety in 2013 as lead contractor responsible for designing the troubled website for the Obamacare program.

Lockheed Martin received more than $37 billion worth of government contracts in 2013, according to

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Kelly Cohen

Staff Writer
The Washington Examiner

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