WASHINGTON – Senator Chuck Grassley today sent a letter to Sun Microsystems to express dismay and concern about the company’s apparent lack of cooperation with a General Services Administration Inspector General audit.
In today's letter to Sun, Grassley says, "I wish to make one point crystal clear. I expect IG Miller to conduct this audit in accordance with his responsibilities under the IG Act." Grassley’s letter also indicates that the Inspector General’s office has yet to receive the necessary documents and information it needs from Sun in order to proceed with the audit. To date, Sun has not provided any of the requested data despite requests from both the Inspector General’s office and the contracting officer.
On June 5, Grassley requested that the Inspector General audit the contract extension awarded by the General Services Administration to Sun Microsystems Corporation on September 9, 2006.
In his request for the audit, Grassley wrote, "If the government is getting a fair deal in this contract, then I want to know it. If not, then Congress needs to understand the full scope of the problem… These requests all deal with how Sun is doing business with the government today, and therefore should not interfere with any ongoing judicial action related to Sun's business practices before September 9, 2006. If you encounter resistance by Sun Microsystems or GSA, including delaying timely submission of requested information, please report it to my office immediately."
Here is a copy of Grassley’s letter to Sun Microsystems.
July 24, 2007
Mr. Scott McNealy
Chairman
Sun Microsystems, Inc.
7900 Westpark Dr.
Suite A110
Mclean, VA 22102-4203
Dear Mr. McNealy,
I am writing you to express my grave concern about the reported lack of cooperation given by Sun Microsystems, Inc. to a request from the General Services Administration (GSA) Inspector General (IG) for information necessary to conduct an audit undertaken at my request.
On July 5, 2007, the IG reported to me that the information needed to conduct the audit had been requested from Sun Microsystems in both a letter and email, dated June 13, 2007. This correspondence requested that Sun Microsystems provide the necessary data for the audits by June 28, 2007. That date has come and gone with no response from Sun.
On July 12, 2007, the GSA Contracting Officer overseeing the contract with Sun Microsystems submitted a letter, again requesting the information needed to conduct the audit. This time the deadline was July 19, 2007. That date has also come and gone, and still no data from Sun.
Under the Inspector General’s Act of 1978, IG’s are "to keep the head of such establishment and the Congress fully and currently informed…concerning fraud and other serious problems, abuses, and deficiencies relating to the administration of such programs and operations administered or financed by such establishment." To that end, on June 5th of this year, I asked the GSA IG to conduct audits of significant portions of the current GSA Multiple Award Schedule contract with Sun Microsystems. On June 5th, I also requested that the GSA IG audit the corrective action plan implemented by Sun following contract deficiencies found during previous Office of the IG (OIG) audits of Sun GSA Multiple Award Schedule contracts.
Mr. McNealy, I wish to make one point crystal clear. I expect IG Miller to conduct this audit in accordance with his responsibilities under the IG Act.
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It is also important to point out to you that in August of 2005, the GSA schedule contract with Sun Microsystems was cancelled partially due to a lack of cooperation with GSA OIG auditors. There is a very well documented trail of evidence that appears to show Sun has consistently failed to fully cooperate with audits of this particular GSA Multiple Award Schedule contract. And this problem has existed for a number of years. Furthermore, as was made clear to Sun Microsystems in the GSA Contracting Officer’s letter referenced above, Sun is required under the terms of the government contract – Clause C.26 - to allow an examination of records by GSA.
It has been reported to me that your company indicated to GSA that the requested data is not required to be reported under the terms of the contract, and that Sun is willing to pay "an outside accounting firm" to evaluate Sun’s corrective action plan. If true, I find this a most surprising and contradictory response. Part of the audit I requested is to be an examination of the contract’s Price Reduction Clause (PRC). The PRC is a key element to a government schedule contract and an important device designed to protect the government and the taxpayers. It is essential to evaluate contract performance. It is interesting that Sun would suggest this data is not covered under the contract’s examination of records clause. If this data is inappropriate for these audits, then what good will it be to have an independent firm audit that same data?
Sun Microsystems has often been praised in the media as having an excellent reputation and for conducting business in an ethical manner. I would think that based on the scope of the alleged violations on this contract in the past, Sun Microsystems would be eagerly seeking maximum transparency on its business operations with the Federal Government today. This is truly a moment for Sun Microsystems, Inc. to shine and to set an example as a government contractor. However, the current situation appears to be rapidly deteriorating into the same old pattern where Sun is fighting and delaying oversight of its government contracts. I assure you that this will no longer be tolerated.
I, therefore, request that Sun immediately comply with the contract and supply the GSA IG with the requested data. These audits are important for Sun, GSA, and the Taxpayers. Inaction, excuses, and delaying tactics are no longer acceptable and will certainly reflect badly on how your company does business with the Federal Government. A reputation of integrity is founded on openness and honesty, and a company such as Sun Microsystems, Inc. should rush to this opportunity to prove that.
. These audits are important for Sun, GSA, and the Taxpayers. Inaction, excuses, and delaying tactics are no longer acceptable and will certainly reflect badly on how your company does business with the Federal Government. A reputation of integrity is founded on openness and honesty, and a company such as Sun Microsystems, Inc. should rush to this opportunity to prove that.
Sincerely,
Charles E. Grassley
Ranking Member
Copies to:
Mrs. Lurita Doan, Administrator, GSA
Inspector General Brian Miller, GSA
House Committee on Oversight and Government Reform
Senate Committee on Homeland Security
. . These audits are important for Sun, GSA, and the Taxpayers. Inaction, excuses, and delaying tactics are no longer acceptable and will certainly reflect badly on how your company does business with the Federal Government. A reputation of integrity is founded on openness and honesty, and a company such as Sun Microsystems, Inc. should rush to this opportunity to prove that.