REPORT OF AUDIT APPRAISAL: CONTRACT INFORMATION SYSTEM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83T00573R000200120007-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 14
• Document Creation Date: December 12, 2016
• Document Release Date: December 4, 2001
• Sequence Number: 7
• Publication Date: August 8, 1980
• Content Type: MF

Approvei{.For Re} W 2Q02A C1A-TDP>33W573
8 AUG 1980
MEMORANDUM FOR: Director of Logistics
VIA: Inspector General 0
FROM:
Chief, Audit Staff
SUBJECT: Report of Audit Appraisal: Contract Information
System
1. Attached is the subject report for your information.
2. This report focuses on three aspects of the Contract Informa-
tion System: Data base integrity, system utilization, and procedures
and controls.
3. Please advise me of action taken on the recommendations
contained in the report.
4. We wish to express our appreciation for the cooperation
and assistance provided by the Office of Logistics CONIF team and
the Office of Finance Audit and Certification Division during the
audit.
Attachment:
As stated
Distribution
D DA
0/F
ODP
0/Compt/BMG
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REPORT OF AUDIT APPRAISAL
OFFICE OF LOGISTICS
CONTRACT INFORMATION SYSTEM
30 April 1980
BACKGROUND
1. In 1965 the Agency recognized a need to rapidly identify
contractors with whom the Agency has contractual relationships. The
Contract Information (CONIF) system was initially developed in response
to this need. Continued efforts to improve it have resulted in a
system which now has on-line input, update, and query, as well as
invoice payment capabilities.
2. CONIF provides management information to the Office of
Logistics (OL) on Agency-funded contracts negotiated by OL's decen-
tralized contracting teams and the OL Procurement Division (PD). In
June 1978, in an effort to reduce the turnaround time in processing
invoices for payment, CONIF was expanded to provide the Office of
Finance (OF) with the capability to process contractor invoice pay-
ments through the system.
3. The CONIF on-line data base consists of twelve files contain-
ing 11,600 contracts. Retirement of 5,200 settled contracts from the
on-line data base to archives was planned for July 1980. The off-line
data base, stored on tape, contains nearly 19,900 retired contracts.
Most of the Fiscal Year 1979 and 1980 contract invoices are being
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document are classified
CONFIDENTIAL
WARNING NOTICE
INTELLIGENCE SOURCES
AND METHODS INVOLVED
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processed and paid through CONIF. An attempt to enter FY 1977 and
1978 contract data into the system to permit payment via CONIF was
determined to require an inordinate amount of resources and was
subsequently terminated. However, about 21 percent of FY 1978 and 25
percent of FY 1977 contracts were converted during this effort.
SCOPE OF AUDIT
4. A survey performed at the start of the audit identified
several areas of audit interest, including:
- evaluation of CONIF's data base integrity (comments begin
with paragraph 7),
- determiniation of the extent of system utilization (comments
begin with paragraph 10), and
- verification of the existence of operational procedures
and systems controls (comments begin with paragraph 15).
5. Hardware usage, software development, and maintenance per-
formed by the Office of Data Processing (ODP) in support of CONIF
consumed $247,400 in resource dollars during FY 1979. The use of
computer hardware in support of CONIF was previously reviewed during
the Office of Data Processing audit and was therefore omitted from
this audit.
SUMMARY
6. The reliability of CONIF has improved significantly since the
last audit appraisal in 1978 as a result of concerted efforts by the
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CONIF input team and OL's contracting teams to assure that quality
controls are maintained over input data. Most users of the system, to
include OL's contracting teams (CT), OF's budget and fiscal offices
(B&F), and OF/Audit and Certification Division (A&CD), generally agree
that, beginning with FY 1979 contracts, the data base is reliable.
However, some contracting and B&F officers continue to question the
reliability of CONIF and consider it an inconvenience with limited
value to them in their daily work. Additional training and the
increased support of these officers is needed to ensure maintenance of
an accurate and reliable contract information data base. The opera-
tional procedures and system controls for the CONIF system need to be
revised and reissued. Changes in data requirements and increased use
of CONIF by A&CD require strict adherence to update schedules and
procedures.
DETAILED COMMENTS
Data Base Integrity
7. The accuracy and reliability of the CONIF data base is of
paramount importance to the success of the system and must meet OL's
needs for management information as well as the Office of Finance's
(OF) requirements for invoice payment. Erroneous data could lead to a
decrease in reliance on CONIF by the contracting teams, resulting in
continued use and proliferation of manual records with a corresponding
underutilization of the automated system. Errors in elements criti-
cal to OF could result in incorrect payments or the compromise of
sensitive contracts.
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8. A statistical sample of contracts taken from the total
population of open contracts in CONIF as of 30 April 1980 was compared
to input documents and official hard copy contracts. The review of
input documents keyed into CONIF was limited to those entered during
the current fiscal year, since input documents over a year old had
already been sent to archives.
9. The prior audit of the CONIF data base, conducted in May
1978, identified an error rate affecting more than 36 percent of the
active contracts reviewed. During preliminary discussions for the
current audit, contracting teams, the CONIF input team, B&F offices,
and A&CD personnel expressed their belief that significant improvements
in the overall quality of the data base had been achieved and that an
error rate of less than 5 percent could be expected. This audit
sample of active contracts, which included all fiscal years in CONIF,
revealed an error rate of approximately 8 percent. However, nearly
half of the errors were related to contracts initiated prior to FY
1979 and can be attributed to the conversion of erroneous data from
the manual system and to data entered into earlier versions of the
CONIF data base which were considered at that time to be infeasible to
correct. While the review confirmed that errors still exist within
the system, it also substantiated the opinion of CONIF users that
significant improvements have been made and provides assurance that
payment information contained in the data base pertaining to FY 1979
and FY 1980 contracts can be considered reliable.
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Utilization of CONIF
10. The CONIF data base contains over 500 data attributes rele-
vant to negotiations, invoice payments, various dates, vendor informa-
tion, etc., that can be queried either on-line or batch processed to
obtain special reports. These capabilities are not understood by
contracting teams and are not being utilized. Eighty percent of the
more than forty contracting team members have never accessed the
system; some have yet to obtain a password. An analysis of a 1 April
1980 CONIF report showing the last CONIF access date for each user
illustrates the problem.
Last CONIF Access Number of CTs
1 to 5 days 3
1 to 4 weeks 1
1 to 3 months 2
4 to 12 months 2
Passwords never used 10
11. Interviews with contracting teams indicate CONIF would be
used more if terminals were readily accessible to team members and if
refresher training in CONIF capabilities were available. Lacking
access or experience in the use of terminals for queries, contracting
team users call on the CONIF input team or A&CD for assistance.
Questions relating to the status of a given contract, whether an
invoice has been paid, and whether a document has been received,
can be easily handled by an individual familiar with the CONIF
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system. Unnecessary calls to the input team or A&CD disrupt the
contract processing cycle and result in time lost from processing
invoices for payment.
12. Some of the contracting teams expressed the view that "CONIF
is primarily a top management reporting tool and is of no use in the
day-to-day processing of contracts." Other contracting officers,
knowledgeable of CONIF's capabilities, do not share this opinion. For
example, some managers in OL have requested special CONIF reports
dealing primarily with statistical information at the division or
office level about contracts settled, completed or in the settlement
process. In other instances team members, after expressing interest
in seeing a specific query, schedule or report that would satisfy
specific types of information, were surprised to find that CONIF could
satisfy their request. CONIF can provide a variety of current
information to assist in the day-to-day processing of contracts,
such as:
- cutoff dates to schedule workload,
- vendor performance records,
- list of vendors other contracting teams are using,
- information on the timeliness of invoice payments,
- list of documents missing from the contract file,
- total amount of payments made on a contract,
- reports on negotiators working with specific contracts, and
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- flags to list contracts nearing overrun status or running
out of funds.
The CONIF data base can be sorted to formulate special reports and to
respond to numerous types of queries. Special reports and schedules
can be requested and once designed would be available for continual
use. On-line queries can also be developed for easy execution by
CONIF users.
13. Identification of recurring queries, schedules, and reports
needed by contracting teams in their day-to-day contract processing
and monitoring activites,in conjunction with the recently completed
CONIF user's manual which is primarily designed to aid the contracting
teams, would be beneficial. The CONIF/Data Base Manager plans to
discuss the user's manual with each contracting team. The discussion
will include sample queries, how to initiate queries, CONIF history,
and other topics of interest.
Recommendation #1: Survey the contracting teams to determine
the.reasons for the low utilization of CONIF and take the
corrective actions necessary.
Recommendation #2: Establish a familiarization and training
program for contracting team members and other CONIF users.
Contracts in the CONIF Data Base
14. Some contractual arrangements are excluded from the CONIF
data base either because they were not intended to be entered into the
system or because contracting teams have not followed the guidance
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provided to them. The original CONIF user's manual included a general
statement that bilateral contracts in excess of $10,000 should be
entered into CONIF, but made no reference to purchase orders and some
other less common contractual arrangements. More explicit guidance
was provided by the Director of Logistics in a 1975 memorandum;
it did not, however, resolve the status of purchase orders. The
contracting teams, with responsibility for entering the contract data
into CONIF, have interpreted the guidance in varying ways, leading to
uncertainty about what the CONIF data base contains or should contain.
While there is agreement that bilateral contracts in excess of $10,000
should be included, some less common types of arrangements are handled
differently by the teams. Examples include:
- purchase orders over $10,000,
- purchase orders over $10,000 on General Services
Administration schedules,
- delivery orders,
- service and maintenance contracts,
- stock item purchase orders,
- collect on delivery contracts, and
- covert procurement.
15. The Office of Logistics is considering whether to include
purchase orders in the CONIF data base. CONIF's usefulness and
reliability would be improved if guidelines defining what should
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be included in CONIF were brought up to date and contracting teams
were required to comply with the guidelines.
Recommendation #3: Provide up-to-date guidelines about what
contracts to include in CONIF and require contracting teams
to follow the guidelines.
16. New contracts received in A&CD are verified to the CONIF data
base using a list of data elements produced on the Texas Instrument
700.printer. These data elements can be obtained in two ways: by an
A&CD request for all data elements in the contract file, or by the use
of a Generalized Information Management System function called a
correlative, which is a predetermined list of selected data elements
stored in the file. The use of a correlative would speed the manual
verification process, as unwanted data would be suppressed. A&CD has
access to two correlatives at this time, but has not used them regu-
larly because they do not satisfy their information requirements.
Additional correlatives could be setup with the help of the CONIF
input team to respond to recurring requests from vendors and
contracting teams.
Recommendation #4: Identify elements needed by A&CD to
update existing correlatives and consider developing additional
correlatives.
RQ/ADD Procedure
17. When a contract is negotiated, a copy is sent to the appro-
priate B&F officer, who records the obligation on an All Purpose Obliga-
tion Document (APOD) and enters it into the General Accounting System (GAS).
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The B&F officer links contract obligation data from GAS to the
CONIF system using an on-line procedure in CONIF called RQ/ADD. Once
the obligation and contract data have been successfully linked, via
the RQ/ADD procedure, A&CD can use the updated CONIF to make contract
payments.
18. Interviews with selected B&F officers revealed common frus-
trations over the RQ/ADD procedure concerning the inconvenience of the
procedure and the difficulty of linking the contract and obligation
data, as well as serious concern about the value of CONIF to them.
Three possible reasons for these opinions are that the GAS/CONIF
update was not performed at regular intervals; many B&F officers are
not fully aware of the CONIF processing cycle; and some B&F offices do
not have sufficient CONIF activity to maintain familiarity with system
capabilities.
19. During the first four months of CY 1980 there was a lag of
from one to five days to update CONIF after the APOD was keyed into
GAS. Given the procedures involved, including an overnight hold by
the ODP Production Division to ensure that the GAS transactions for
the day are correct, it seems that the CONIF update should be com-
pleted in about one day. Because of the irregularity of CONIF updates
by the ODP Production Division, B&F officers lack a sense of urgency
in the initiation of the RQ/ADD procedure; with the known problems in
the timely payment of contractor invoices and the increasing reliance
on CONIF in the payment process, all offices involved should make
every effort to maintain CONIF in a current status.
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Recommendation #5: Assure that B&F officers initiate the
RQ/ADD procedure to update CONIF on a timely basis.
Recommendation #6: Require the ODP Production Division to
create and run the GAS/CONIF update each day.
Secure Mailing Addresses
20. An important element within the CONIF data base is the
secure mailing address. This address is used for Agency correspon-
dence with contractors performing tasks covered by classified con-
tracts, which include about 70 percent of the contracts in the CONIF
data base. The Office of Logistics Security Staff (LSS) is respon-
sible for establishing secure addresses.
21. When an acceptable secure mailing address is determined for a
vendor, LSS prepares a Contractor Approved Address Notice (Form 2663),
which is currently sent to eleven different offices. LSS also inputs
the address data into its "mailing label system."
22. The CONIF input team receives a copy of secure address
notices and, using the information on the form, inputs the address
data for each affected active contract. The team also prepares an
index file card for use as a ready reference for current vendor
addresses. Without this index file, a time-consuming search of CONIF
would be required each time a classified contract is added to the data
base.
23. The secure mailing data is presently being typed at least
four times: twice by LSS (onto the Contractor Approved Address Notice
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and into the "mailing label system") and twice by the CONIF input team
(keyed into the data base and to the index file). When there are
multiple open contracts with a vendor, CONIF must be updated with the
address keyed in for each contract. The "mailing label system" could
be modified to provide for capturing the data at the source (LSS),
thus avoiding unnecessary keying. Modification of the mailing label
system would not only accommodate the address label function, but
could also provide for printing the required copies of computer-
generated contractor-approved address notices for distribution. With
enhancements to CONIF that would permit the mailing label system to
update the secure address and to modify CONIF storage capability to
accommodate multiple approved addresses for each vendor, the CONIF
input team could be eliminated from the secure address input process.
A work order to ODP requesting the multiple addresses enhancement was
submitted in January 1980. If the vendor address file could accommo-
date receiving data directly from the expanded labeling system, data
handling of the secure mailing address would be cut from four or more
to one, with one office having update responsibility.
Recommendation #7: Consider expanding the LSS "mailing
label system" to accommodate capturing secure mailing address
data at the source.
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