Management Alert: Ensuring Proper Oversight of Major Contracts to Avoid Significant Cost Overruns

The AmeriCorps Office of Inspector General (OIG) has identified concerns regarding the award, management, and oversight of a contract for AmeriCorps’ new grants management system. Specifically, this alert identifies several factors contributing to cost overruns that will likely exceed $9 million—more than double the amount of the original contract—including the choice of a firm-fixed price contract for a project with uncertain requirements, a lack of technical expert involvement in contract oversight, and the descoping of contract tasks to accommodate cost overruns. While the OIG has not yet undertaken a full review of the allegations received, information collected to date warrants alerting AmeriCorps leadership of these concerns so that management has timely information to mitigate these risks in its ongoing management of this and other major contracts. AmeriCorps oversees many contracts, including other contracts related to IT modernization. As set forth below, AmeriCorps OIG suggests specific steps that AmeriCorps take to improve its contract management practices and avoid wasteful contract overruns.