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PSAD-77-151 1 (1977-08-31)

handle is hein.gao/gaobaacqw0001 and id is 1 raw text is: DOCUMENT RESUME 03582 - [A24936211 Federal Energy A4ministrationts Contract with the Advertising Council, Inc., for a Public Relations Campaign on the Need to Save Energy. PSAD-77-151; B-178205. August 31, 1977. 23 pp. + 6 appendices (1I4 pp..). Report to Rep. John D. Dingell, Chairman, House Committee on Interstate and Foreign Commerce: Energy and Power Subcommittee; by Elmer B. Staats, Comptroller General. Issue Area: Energy: Effect of Federal Efforts on Energy Cotservation (1607); Federal Procurement of Goods and Services: Reasonableness of Prices Under Negotiated Contract; and Subcontracts (1904). Contact: Procurement and Systems Acquisition Div. Budget Function: Natural Resources, Environment, and Energy: Energy (305). Organization Concerned: Advertising C~uncil, Inc.; Department uf Agriculture; Department of Defense; Department of Transportation; Federl Energy Administration. Congressional Relevance: House Committee on Interstate and Foreign CoMLerce; House Comsittee on Interstate and 7oreign Commerce: Energy and Power St'bcommittee; Senate Committee on Energy and Natural Resources. In October 1973 The Advertising Council, Inc., was selected to conduct a nationwide public service advertising campaign to encourage energy conservation. Although the contract expired in September 1975, contracturil disputes have prevented final monetary settlement. Findings/Conclusions: Following expiration of the contract, Federal Eaergy Administration persnnnel began to question whether the Council should be reimbursed for some of the costs, and former personnel publicized allegations of fraudulent claims. No indication of fraud was found. There were some costs that appeared questionable until subjected to further audit. Of the $18,985 questioned, $11,351 was allowable, $4,336 was uDallowable, aa. $3,296 was unresolved. The Government has withheld $25,659 pending resolution of this matter. The cost questions can be attributed to a lack of understanding and agreement as to what constituted reimbursable expenses. The creative services subcontractor's personnel were not familiar with the Federal Procurement Regulations and followed what they considered to be routine business procedures. Recommendations: The Federal Energy Administration should direct its contracting officer to reimburse the Council $18,027, the difference between the amount unpaid and the amounts unallowable or still in question, and to make a final determination on the $3,296 in unresolved costs and expedite a final settlement. The Advertising Council, Inc., shuuld develop and employ procedures that will alert its subcontractors to applicable Federal Cost principles. (Author/SC)

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