WASHINGTON – Senator Chuck Grassley today reiterated the need for the Inspector General of the General Services Administration to perform an audit on a current contract with Sun Microsystems. A previous audit uncovered alleged contract violations and potential fraud with Sun. Those issues were subsequently referred to the Department of Justice and are now in court and will be dealt with in that arena.
Grassley’s letter follows reports that Sun Microsystems had hired an outside accounting agency to conduct an audit of their contract with the General Services Administration.
In the letter, Grassley reiterated the duties of the Inspector General to root out waste, fraud, and abuse in government operations. He wrote, “If Mr. Miller’s audit uncovered problems on the Sun contract, he was required to report those matters to the Administrator and to the Congress. Those responsibilities are clearly embodied in the IG Act. And that is exactly what Mr. Miller and his office has done in regard to the audits of Sun Microsystems. And that is exactly what I expect Mr. Miller to do on the new audit.”
Grassley has been investigating the actions of the General Services Administration in monitoring and extending the Multiple Award Schedule contract with Sun Microsystems as well as interaction between the Inspector General and the Administrator at the Agency.
Here is a copy of the letter from Grassley to Sun Microsystems Chairman, Scott McNealy.
August 2, 2007
Mr. Scott McNealy
Chairman
Sun Microsystems, Inc.
7900 Westpark Dr .
Suite A110
Mclean, VA 22102-4203
Dear Mr. McNealy,
I am writing you in response to your letter to me, dated July 25th, to express deep concern about your apparent willingness “to cooperate with a full and fair examination of the issues” but not with the GSA Inspector General’s (IG) audit that I have requested.
First, let me address your concerns about the objectivity of the GSA Inspector General, Mr. Brian Miller. I have complete confidence in the integrity of the GSA Office of Inspector General (OIG). Further, it is the job of any IG to root out waste, fraud, and abuse in government operations. If Mr. Miller’s audit uncovered problems on the Sun contract, he was required to report those matters to the Administrator and to the Congress. Those responsibilities are clearly embodied in the IG Act. And that is exactly what Mr. Miller and his office has done in regard to the audits of Sun Microsystems. And that is exactly what I expect Mr. Miller to do on the new audit. If he does anything short of that, he is not doing his job. IG’s must meet the highest standards of integrity and be beyond reproach.
I think you must understand two things in regard to the past and current audits of Sun’s contract by the GSA IG. Neither was initiated by the GSA Office of Inspector General. The first series of audits were started as a result of a complaint to the GSA IG “hotline.” Those audits uncovered alleged contract violations and potential fraud. Those issues were subsequently referred to the Department of Justice and are now in court and will be dealt with in that arena. Secondly, the current audits were not initiated by the GSA IG. They were initiated by me.
I have conducted my own investigation of the actions of GSA in monitoring and extending the Multiple Award Schedule contract with Sun. I do not wish to engage in a debate with you or GSA into whether this contract is good or bad for the .
My own investigation has uncovered some disturbing issues, and all those findings will be presented in a report to be issued in the near future. Based on the results of this oversight investigation, I asked the IG to audit both the Price Reduction Clause of the contract along with Sun’s “Corrective Action Plan.” The Corrective Action Plan, the completion of which was a major factor in the contract extension award, has never been fully evaluated. That is what I want Inspector General Miller to do - Nothing more, nothing less.
I certainly understand that contract audits often require the accumulation of vast amounts of material, and I appreciate the fact that the process of assembling these materials can take time. However to set the record straight, the first request for these materials came to Sun from the IG on June 13, 2007 with a deadline set for June 30, 2007. The request by the contracting officer on July 12, 2007, was the second request for the data. The second deadline was July 19. 2007. It is quite probable had Sun informed the IG that Sun intended to comply back in June, we would not be having this exchange of correspondence.
IG Miller informed my staff today that Sun recently provided some of the requested information to the GSA contract officer. Initially the GSA contract officer refused to provide that information to the IG. However following discussions with the General Counsel at GSA, an agreement was reached to transfer the material to the IG. That occurred this morning. The IG is now conducting an inventory of that material to determine whether it complies with the IG’s June 13th data request in full. If so, the audit will proceed.
I also note that your response to my letter seems to indicate that Sun only intends to provide information related to Price Reduction Clause of the contract. While this clause and its function is very important, I have also asked the IG to examine the “Corrective Action Plan” that Sun implemented last year to correct previous problems with this contract. It is imperative that the IG assess this plan as well.
I have learned that Sun’s compliance with the Corrective Action Plan is the key to determining whether Sun is a “responsible vendor” and worthy of a Government contract. I have also learned that Sun may have already hired a private accounting firm to perform its own assessment of this Corrective Action Plan. Retaining an independent audit firm is standard operating procedure in private industry. However, that initiative cannot be a substitute for my request for a GSA IG audit of the Corrective Action Plan.
The IG Act requires Inspectors General to be “independent and objective” and to perform audits that “comply with established standards established by the Comptroller General of the .” This Corrective Action Plan, developed by Sun and reviewed by GSA, deals specifically with how Sun is handling U.S. Government money. I expect Inspector General Miller to complete this audit, and I expect Sun Microsystems to comply fully with the terms of the contract in providing the documentation and data requested by the IG.
I believe that I have made my position on this issue as clear as possible, and I hope, as you stated to me, that Sun continues to take all appropriate steps to cooperate with a full and fair examination of these issues.
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