Data Quality is Imperative for Providing Insight into Federal Contract Spending for COVID-19

Key Takeaways:

• Federal contract spending data accuracy, data entry, and data coding will be vital in fighting waste, fraud, and abuse, and necessary to providing oversight.  
• Most federal contract spending related to COVID-19 response and agency continuity of operations to date appears to fall into rational categories of expenditure.
• Billions of dollars in federal spending to respond and react to the COVID-19 pandemic could go undetected due to a lack of proper coding.

A number of watchdog groups are tasked with monitoring the trillions of dollars being distributed by the federal government related to COVID-19 response and relief. One major area of interest will be direct federal contract spending related to COVID-19 preparedness, response, and relief. The Federal Data Procurement System (FPDS) provides insight into federal agency contract spending and is the basis of Deltek’s GovWin IQ contracts data and Federal Spending Analysis (FSA) capability.  In this blog, I look at some of the anomalies in the data and data coding to date.

As of earlier this week, civilian agencies had obligated $6.4B in federal contract spending for COVID-19 related products and services. Defense agency contract spending reporting lags real-time by 90 days, so we currently have no insight into DOD COVID-19 contract spending.  Contract spending for COVID-19 is coded in the FPDS data under a field labeled National Interest Action (NIA). This field is used to track spending related to emergency responses or other nationally significant events.

The dataset I analyzed contained 4,362 contract actions coded as NIA of COVID-19. More than half of the spending was by HHS, nearly $3.9B.  Most of the total federal spending, $3.9B, fell into the category of medical and scientific equipment followed by architecture, engineering and construction at $777M.

I manually scanned approximately 20% of the actions for the contents of their contract requirements field which describes the products or services being procured.  Nearly all of the actions I reviewed appeared to be logical purchases in response to the pandemic or mission continuity. There were a few actions that caught my eye:

• An action from NIH for “explosive testing items for vehicle checks.”  This service could be related to maintaining the safety of NIH employees during the pandemic rather than a data anomaly.
• An action from the National Forest Service for reader boards. These products could be for posting signage about the status of closure for particular Forest Service sites due to the pandemic.
• The Forest Service also had two actions for vegetation management services, specifically hand thinning, for two different locations, however there was no funding associated with either of these actions.
• The Indian Health Service had a contract action for fuel tank replacements, but with no associated funding.
• ICE showed a contract action for fitness center management services at its headquarters, but again with no dollars associated with the action.
• Interior Department’s Bureau of Reclamation showed an action for a boundary survey, but the action showed no funding.
• A number of actions contained text related to the action being a contract modification or contract delay due to COVID-19.

Due to the volume of actions, I wasn’t able to manually review all four thousand, but I did take a deeper dive into specific categories of actions to read the contract requirement text, specifically for actions in the categories of chemicals and fuels, R&D, and IT.

I found no unusual purchases in the chemicals and fuels, or the R&D actions. In the IT category, I found a few actions that appeared to be related to COVID-19 but were not necessarily for IT products and services.  These included purchases of office supplies, paper products, PPE, sanitary wipes, sanitizers, and construction management to support COVID-19. There were 50 actions categorized as IT that contained no dollar value, two of which were for NASA to support space and ground research testing.

Twenty-two percent of all four thousand actions contained no dollar value.  This could be a reflection of contracting flexibilities afforded to agencies during the national emergency where they are not required to specify a dollar amount upfront but can treat the contract obligation as open-ended. Additionally, 116 of the contract actions contained negative dollar amounts or deobligations. Most of these actions didn’t specify the reason for the deobligation, but a few listed the actions as corrections, decreases in the original order amount, or cancellation of the order.

I also analyzed all contract actions to date in FY 2020 for COVID-19 related spending, not just actions with the appropriate NIA code for COVID-19. Although federal agencies are directed to use the NIA code to identify COVID-19 contract actions, I wanted to see if there were identifiable contract actions for COVID-19 that were not coded with the proper NIA code. I found 673 contract actions in FY 2020 that contained the keyword “COVID” but did not show the NIA code for COVID-19.  These actions totaled $1.5B, with $904M from HHS and $534M from DHS.

A manual scan through the requirements text for these contract actions revealed that they appeared to be related to the COVID-19 response or supporting agency telework efforts. This begs the question of how much federal spending on COVID-19 efforts are we missing if we solely rely on the NIA code.

Oversight, accountability, and combating waste, fraud and abuse in federal COVID-19 spending is partially dependent on contract spending data for analysis of trends. Miscoding, anomalies, mistakes, or errors will make it more challenging for oversight bodies and the general public to monitor federal contract spending.