fdic contract awards 2021

In 2009 and 2010, the services obtained were overseen by the FDICs Division of Information Technology. Conduct periodic reviews of controls and processes. Although not identified within the FDICs Risk Inventory, the Agency relied heavily on Blue Canopy to operate and service the corresponding risk management mitigating controls. We have maintained the structural and data integrity of the original printed product in this text file to the extent possible. Ultimately, if an agency fails to ensure proper management and oversight of procured Critical Functions, contractors may take actions that are not based on informed, independent judgments made by Government officials. Appendix 2 Identified Best Practices and Their Sources. The 7.5-year task order calls on DMI to provide infrastructure support services, including modernization of data center and network operations, client and cross-functional services, unified communications, service desk, monitoring and event management, and cloud migration. In addition, the contract did not stipulate that Blue Canopy should already have had the appropriate protections for backing up information, and maintaining disaster recovery and contingency plans with sufficiently detailed operating procedures. 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The FDIC relies on contractors to support a range of activities from janitorial to Information Technology support services. According to the FDICs Financial Institution Letter titled Third-Party Risk Guidance for Managing Third-Party Risk (FIL-44-2008) (June 2008), [a]n institutions board of directors and senior management are ultimately responsible for managing activities conducted through third-party relationships, and identifying and controlling the risks arising from such relationships, to the same extent as if the activity were handled within the institution. In addition, the guidance provides a general framework that boards of directors and senior management may use to provide appropriate oversight and risk management of significant third-party relationships. A third-party relationship should be considered significant if, in part, the third party performs critical functions; or, the third party stores, accesses, transmits, or performs transactions on sensitive customer information. The Federal Deposit Insurance Corporation (FDIC) is an While identifying and understanding the risks associated with the third party is critical at the outset, the long-term management of the relationship is vital to success., In addition, the guidance noted that [t]he extent of oversight of a particular third-party relationship will depend upon the potential risks and the scope and magnitude of the arrangement. For evaluation purposes, the OIG considers this guidance a best practice. The OIG also concluded the FDIC needed a formal process for reviewing security control assessment reports to ensure that Blue Canopy performed sufficient security control testing. According to the FDIC Legal Division, the FDIC does not fall within the definition of executive agency in the [Office of Federal Procurement Policy] Act., Become over-reliant on a third-party contractor to achieve its mission and conduct operations;3. 2. : 12; Corrective Action: Taken or Planned - The FDIC will consider additional reporting requirements related to contracts for essential functions or for services necessary during a business continuity event, including where such functions are performed by a single vendor, in conjunction with the study and actions described in response to Recommendation 1.; Expected Completion Date: March 31, 2022; Monetary Benefits: $0; Resolved-a - Yes or No: No; Open or Closed-b: Closed; Row 13: ; Rec. JP Morgan Chase assumes all deposits of First Republic Bank, San Francisco, CA, FDIC Releases Report Detailing Supervision of the Former Signature Bank, New York, New York, FDIC Releases Semiannual Update on Deposit Insurance Fund, FDIC Announces Retention of Financial Advisor to Assist with the Liquidation of Securities of the Former hZ]o\+|l3O 'iQ8q E=(F*k}gxr(}H ok @3rI| HJ`3d$nBk Estimated Completion Date: March 31, 2022. In addition to existing requirements for oversight management, the FDIC remains committed to the use of SLAs and other controls to manage vendor performance and is considering additional controls to ensure the independence, training, and professionalism of oversight managers. An agency may become over-reliant on a service provider if it does not have the capacity (number of Federal employees) and capability (Federal employees with appropriate training, experience, and expertise) to oversee the contractor properly. The recommendations include incorporating provisions of the OMB Policy Letter 11-01 into the FDICs policies and procedures, identifying Critical Functions during the procurement process, and implementing heightened contract monitoring for Critical Functions. The FDIC Board of Directors. In addition, the FDICs Enterprise Risk Management program may not ensure that the FDIC has appropriately identified, measured, monitored, reported, and mitigated the FDICs significant risks for contracts and contractors. Conduct a procurement risk assessment for Critical Functions during the procurement planning process, for each contract involving Critical Functions. No. The SPPS BOA also includes SLAs, which carry monetary penalties when the vendor defaults and include an incentive for the vendor to earn a contract extension by successfully proposing a conversion of their time-and-material work to firm-fixed-priced. The GAO report, DHS Service Contracts: Increased Oversight Needed to Reduce the Risk Associated with Contractors Performing Certain Functions (GAO-20-417) (May 2020), found, in part, that DHS did not consistently plan for the level of Federal oversight needed for certain contracts because there was no guidance on how to document and update the number of Federal personnel needed to conduct oversight. Footnote: 2 OMB Policy Letter 11-01 established Executive Branch policy and was addressed to the heads of civilian and Executive Departments and agencies. The Department of Treasury Forecast of Contract Opportunities includes projections of all anticipated contract actions above $150k that small businesses may be able to perform under direct contracts with Treasury, or perform part of the effort through subcontract arrangements with the Department's large business prime contracts. This table presents managements response to the recommendations in the report and the status of the recommendations as of the date of report issuance. The following information is regarding awarded contracts that can be used to develop prime contractor, subcontractor and teaming partner relationships on these and other opportunities. documentation of laws and regulations, information on The FDIC provides a wealth of resources for consumers, Footnote: 5 The term critical functions only appears once in the Introduction section of the guidance. According to the FDICs Legal Division, OMB Policy Letter 11-01 does not directly apply to the Agency but it may be used for guidance. For example, as noted above, the following agencies noted heightened contracting monitoring, such as: o Develop a Management Oversight Strategy. Footnote: * The FPDS-NG is the current central repository of information on Federal contracting. The U.S. Department of Health and Human Services (HHS) issued an award to Drger for the supply of National Institute of Occupational Safety and Health (NIOSH) approved N95 respiratory protection masks. The Blue Canopy Group, LLC (Blue Canopy) performed a range of cybersecurity and privacy support services for the FDIC. ; Expected Completion Date: June 30, 2022; Monetary Benefits: $0; Resolved-a - Yes or No: No; Open or Closed-b: Closed; Row 10: ; Rec. testimony on the latest banking issues, learn about policy According to the Council of the Inspectors General on Integrity and Efficiencys Quality Standards for Inspection and Evaluation, evaluations are systematic and independent assessments of the design, implementation, and results of operations, programs, or policies. An official website of the United States government. Over a 3-year period, from 2017 to 2019, the FDIC awarded nearly 4,000 contracts valued at more than $1.3 billion. Footnote: 29 For Contract CORHQ-14-C-0778, the FDICs IGCE estimated that it would cost $26,387,825 to procure the services from a third party versus the estimated cost of $23,834,747 to perform the services internally with Federal employees, a variance of $2,553,077. GAO also found that DHS personnel did not identify specific oversight activities they conducted to mitigate the risk of contractors performing functions in a way that could become inherently governmental. (Appendix 3 describes the NIST guidance we identified related to procured Critical Functions.). Best Practices: 5. Such actions by contractors create risks that governance and decisions of significant public interest are not made by Government officials who are accountable to the President and bound by laws controlling the conduct and performance of Federal employees. The BOAs have a total Award Value of $398 million. In addition, a prior OIG report, Security Configuration Management of the Windows Server Operating System (AUD-19-004) (January 2019) concluded that Blue Canopy lacked independence. The FDICs OCISO and DOA submitted to the Board, through its established procurement process, a Board Case Package and Award Profile Reports.38 These documents, however, did not identify the procured services that were Critical Functions nor did they present the planned or implemented heightened oversight management activities for the Critical Function procurements. DHS also lacked guidance on what these oversight tasks could entail. A prior OIG report, Security Configuration Management of the Windows Server Operating System, (AUD-19-004) (January 2019), found that the FDIC tasked Blue Canopy with both designing security controls and assessing their effectiveness, which impaired the firms ability to conduct an impartial assessment. DODs policies and procedures predated the publication of this requirement, and consequently contained no reference to it. In order to answer our objectives, we reviewed Blue Canopys two existing contracts, as of May 2020,5 with the FDICs Chief Information Officer Organization (CIOO), and the FDICs acquisition process to identify and manage procured Critical Functions. Figure 3 illustrates the best practices for performing a procurement risk assessment during the FDICs acquisition process. endstream endobj 520 0 obj <>stream As such, OMB Policy Letter 11-01 defined an Inherently Governmental Function as a function that is so intimately related to the public interest as to require performance by Federal Government employees The term includes functions that require either the exercise of discretion in applying Federal Government authority or the making of value judgments in making decisions for the Federal Government, including judgments relating to monetary transactions and entitlements. OMB Policy Letter 11-01 requires certain Federal agencies to ensure that contractors do not perform Inherently Governmental Functions. The awards, now in their third year are organised by international engineering federation FIDIC (the International Federation of Consulting Engineers). As a result, the GAO recommended that the DHS should (1) develop a risk-based approach for reviewing service requirements to ensure proposed service requirements are clearly defined and reviewed before planning how they are to be procured; (2) update the Inherently Governmental and Critical Functions Analysis to provide guidance for analyzing, documenting, and updating the federal workforce needed to perform or oversee service contracts requiring heightened management attention; and (3) [develop] guidance identifying oversight tasks or safeguards personnel can perform, when needed, to mitigate the risk associated with contracts containing closely associated with inherently governmental functions, special interest functions, or critical functions., As part of an institutions risk assessment, the institution should also identify performance criteria, internal controls, reporting needs, and contractual requirements that would be critical to the ongoing assessment and control of specific identified risks in other words, a management oversight strategy that allows for assessment of performance, as well as mid-course corrections. The guidance also noted that [a]fter completing the general assessment of risks, particularly relative to the institutions overall strategic plan, management should review its ability to provide adequate oversight and management of the proposed third-party relationship on an ongoing basis. The winners have been announced for the 2021 FIDIC Contract Users' Awards. 2) Identify Critical Functions during the procurement planning, award, and contract management phases of the acquisition process. Phase 3: Contract Management - Program Office and DOA Acquisition Services Branch implement the management oversight strategy for the acquired Ciritical Function. Phase 1: Procurement Planning - Program Office and DOA Acquisition Services Branch develop a management oversight strategy for the planned acquisition of a Critical Function, which includes determining the contract structure (key provisions). The Risk Inventory does not identify procured critical functions as a separate and distinct risk. Therefore, while we determined that Blue Canopy performed Critical Functions at the FDIC, as defined by OMB Policy Letter 11-01 and best practices, the FDIC did not identify these services as Critical Functions during its procurement planning phase. The objective of these reviews should address the controls effectiveness in deterring or mitigating the agencys over-reliance on the contractor, and ensuring that the agency maintains control of its mission and operations. In particular, the official stated that the IGCE included a comparison of the costs to conduct the planned activities internally against the cost for a vendor(s) to perform those same activities. 13) Report to the Board about the Award Profile Reports and corresponding status reports for procured Critical Functions during the contract management phase of the acquisition process on an individual and aggregate contract basis, for its consideration. hbbd``b` ]$Y\v$ The importance of the FDIC reviewing financial and audit reports and periodically monitoring the contractors operations was demonstrated by the FDICs experience with Blue Canopys predecessor. Implement periodic reviews for procured Critical Functions, including for the BOAs and task orders for Managed Security Services Provider and Security and Privacy Professional Services. FDIC, OCC, Fed. Reserve Final Rule: Computer Security Incident Notification The FDIC provides a wealth of resources for consumers, DOA will revise the APM and PGI to reflect any resulting process and control enhancements. As such, we have concurred or partially concurred with all of the OIG recommendations. Report to the Board about the Procurement Risk Assessments, Management Oversight Strategies, and contract provisions that address identified risks for planned Critical Functions during the procurement planning phase of the acquisition, for its consideration. endstream endobj startxref Management Report: Improvements Needed in FDIC's Internal Control over OMB Policy Letter 11-01 advises certain agencies that they should ensure that Federal employees perform and/or manage Critical Functions to the extent necessary for the agency to operate effectively and maintain control of its mission and operations. As noted above, the OIG identified best practices from OMB Guidance, the GAO, industry standards, and Federal agencies. scJB/[]T"/7H. In 2019, these services comprised 38.3 percent ($16.2 million) of the OCISOs annual operating expenses ($42.3 million). Risks are identified from various sources and are captured in the risk inventory. Browse our Compromise the trust (or data) by failing to exercise due care in establishing appropriate controls to protect sensitive information and to identify and mitigate data breaches. Footnote: 1 The FDICs acquisition procedures are scalable based on the risk and complexity of the procurement and require increased planning, oversight, and monitoring commensurate with a procurements risk and importance. For example, as noted above, the following agencies noted heightened contracting monitoring, such as: o Develop a Management Oversight Strategy. The FDIC Division of Administration (DOA) awarded 2,633 contracts valued at $2.85 billion over the 5-year period 2017-2021, averaging $570 million annually. The FDIC acknowledged that it is engaged in efforts to improve its acquisition services and oversight management programs. Revise the management oversight strategy for the procured Critical Functions performed under the BOAs for Managed Security Services Provider and Security and Privacy Professional Services to ensure that the strategy aligns with best practices. The contracting officer may use any combination of contract type and pricing arrangement suitable to the procurement. Challenge, Quarterly Banking Profile for Fourth Quarter 2022, Quarterly Banking Profile for Third Quarter 2022, FDIC Releases 2021 National Survey of Unbanked and Underbanked Households, Financial Learn about the FDICs mission, leadership, documentation of laws and regulations, information on These services are critical to ensuring the security and protection of the FDICs Information Technology infrastructure and data. To resolve these 12 recommendations, we would expect that the FDIC provide a clear indication of the specific actions within the next 6 months, and we will determine whether the recommendations may be converted to being resolved at that time, or whether they will remain as unresolved. For the 12 unresolved recommendations, the FDIC plans to consider and further study the issues and does not intend to implement corrective actions for another year (between March 31 and June 30, 2022). Separate from the prior OIG review, the FDIC also made a management determination to reduce our reliance on a single contractor for information security and privacy services. 2i/y/v&ki35$PRr#{ GsN7?Zv|R@$"'* Management should also consider mandating exception-based reports that would serve as notification of any changes or problems that could affect the nature of the relationship or pose a risk to the financial institution.. independent agency created by the Congress to maintain testimony on the latest banking issues, learn about policy Federal Awards | Advanced Search | USAspending Over a seven-and-a-half-year term, the contractors will help FDICs Division of IT deal with operations and maintenance support of its infrastructure while the financial agency looks to improve productivity and efficiencies to continue to mature between 2020 and 2027, says a new solicitation. The FDIC wants a handful of vendors to join the contract, but just one will get the bulk of the work. encrypted and transmitted securely. system. Typically, Critical Functions are recurring and long-term in duration. The policy letter recommends that Federal employees should perform and/or manage Critical Functions to the extent necessary for the agency to operate effectively and maintain control of its mission and operations. In particular, Federal employees must be able to understand the agencys requirements, formulate alternatives, manage the work product, monitor the contractors used to support the Federal workforce, and adequately mitigate the potential impact on mission performance if contractors were to default on their obligations. So far this year, the federal government plans to spend $3.66 Trillion including $315.45 Billion on Net Interest $129.34 Billion on Veterans Benefits $41.95 Billion on Agriculture See more breakdowns of federal spending Featured Content COVID-19 Spending Track federal spending in response to the COVID-19 pandemic Resources Reports.31 As part of the procurement risk assessment, or as a separate management oversight strategy, an agency should identify the contract structure and key contract provisions, such as the types and frequency of reports to be provided and reviewed. The OIG report, Contract Oversight Management (EVAL-20-001) (October 2019), noted that some CIOO Oversight Managers lacked the workload capacity to oversee contracts, and certain Oversight Managers were not properly trained or certified.
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