Summary audit report on contractor employee relocation and temporary living costs

The purpose of this report is to highlight an area of contracting that requires Departmental attention to ensure that only reasonable and allowable costs are reimbursed for contractor employee relocation and temporary living costs. The Office of Inspector General issued nine audit reports over the past 5 years that identified almost $13.6 million of unreasonable or unallowable charges by contractors for employee relocation and temporary living costs. The absence of adequate controls to limit reimbursements to reasonable and allowable amounts was primarily caused by either vague contractual provisions or contractual provisions that were not consistent with the FAR or DEAR. The result has been that contractors were reimbursed for employee relocation and temporary living costs for which they were not entitled. Because of the sizable number of contractor changes in process and anticipated and the related relocation of contractor employees, we believe the issues raised in the audit reports require the attention of the Department`s senior managers