Price Reduction on Laptop Computers

January 7, 2005
Audit Report 05-002

TO:Stephen M. Beard
Deputy Assistant Inspector General for Audits
FROM:Arleas Upton Kea, Director
Division of Administration
SUBJECT:Draft Report Entitled, Price Reduction on Laptop Computers
(Assignment Number 2005-012)

The Division of Administration (DOA) has completed its review of the subject Office of Inspector General (OIG) report. We have evaluated the report recommendation and this memorandum provides our “Management Response” that includes an expected completion date.

MANAGEMENT RESPONSE

OIG Recommendation: The OIG recommends that the Director, DOA pursue recovery of $1,967,863 from iGov.com (iGov) based on IBM Thinkpad laptop computer prices that should have been charged according to iGov’s Blanket Purchase Agreement and the Federal Supply Schedule contract provisions.

DOA Response: DOA concurs with the recommendation. At the time of purchase order award and each applicable purchase order modification, the Acquisition Services Branch (ASB) and the Division of Information Resources Management (DIRM) were never informed by iGov of any unit price reduction(s) offered by IBM. It appears from the analysis conducted by the OIG, the unit price reduction should have been passed on to the FDIC along with the same discount provided originally with the award. A demand letter will be issued by January 31, 2005.

If you have any questions, please contact Deena Weatherly, Chief, Infrastructure Contracting Unit, on (202) 942-3218.

cc:Rus Pittman, DIRM
James H. Angel Jr., OERM
Dave McDermott, DOA ASB
Last updated 7/07/2005