An audit released by the Deputy Assistant Inspector General (DAIG) for Acquisition Audits on February 3, 2012 questions the Multiple Award Schedule  (MAS) Program Industrial Funding Fee (IFF).

“If anything, given the trend of increasing growth of costs and decreasing growth of revenues, one might conclude that the fee customers are paying is actually too low,” says FAS Commissioner Steve Kempf. The DAIG acknowledges the rising MAS costs on pages 7 and 8 of the report. “Costs grew 16 percent in FY 2010, versus revenue growth of 1 percent. Costs grew 10.7 percent in FY 2011, while revenue grew 2.1 percent. FAS projects that in FY 2012, costs will grow 13.5 percent, whereas revenue will grow 2.2 percent. Costs have grown in part because of large capital investments benefitting the MAS Program and elimination of a hiring freeze,”  the report states and recommends including forecasted operational costs and planned investments in future IFF and ASF evaluations.

(Source: AUDIT OF THE MULTIPLE AWARD SCHEDULE PROGRAM INDUSTRIAL FUNDING FEE, REPORT NUMBERA 090256/Q/A/P12003)

Another issue the DAIG addresses in the recent audit is MAS customer disclosure. Currently agencies and schedule holders are informed that IFF revenues are dedicated to the MAS program. In reality, IFF revenues goes into the ASF and other FAS programs draw from it for cost recovery. The FAS is currently operating the ASF in accordance the GSA Modernization Act of 2006 (Public Law 109-313), which granted the GSA  Administrator such authority , but the DAIG recommends revising  General Services Acquisition Regulation (GSAR) Clause 552.238-74 Industrial Funding Fee and Sales Reporting clause of July 2003 for operational transparency. Currently, the FAS has no responsibility to inform customers where IFF revenues are being distributed.

To view the entire report, click here.