By: Paul Emanuelli
This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2020 report entitled Management Advisory Memorandum of Concerns Identified with the Federal Bureau of Prisons’ Procurement of Food Products, the U.S. Department of Justice Office of the Inspector General raised significant contract management concerns over the Federal Bureau of Prisons’ (BOP) food procurement program. As the report summarized, the BOP had no quality assurance plan to ensure that its procured food products met contract specifications, industry standards, or legal requirements:
The purpose of this memorandum is to advise you of concerns the Department of Justice Office of the Inspector General (OIG) has identified in connection with the Federal Bureau of Prisons’ (BOP) procurement of food products. During the course of recent OIG investigative activity, we have learned that the BOP does not have a quality assurance plan to ensure that food products procured by the BOP meet the specifications outlined in BOP contracts, the standards set forth in BOP’s national menu, industry standards, and legal requirements. We also have learned that individual BOP institutions do not always properly document or share information about vendors that provide substandard food products to the BOP.
The Inspector General also found that the BOP failed to properly document or share information when vendors failed to meet those standards, failed to protect the well-being of inmates and staff, and failed to deter fraud and waste:
Failing to proactively ensure that the BOP’s food supply is safe and consistent with contract specifications and other standards and requirements and failing to document and communicate vendor performance issues potentially endanger the health and well-being of both BOP inmates and staff. These shortcomings also reduce the government’s ability to deter, prevent, and detect fraud, waste and abuse. In this memorandum, the OIG makes three recommendations to address these concerns.
As the Inspector General noted, in the fiscal year 2019, “the BOP allocated 5.7% or approximately $401 million of its budget to food products and food services for the roughly 180,000 inmates housed in 122 BOP institutions” and that in that year “the BOP estimated it served approximately 175 million meals, which is nearly 479,000 meals per day.” The report found a lack of co-ordination in the procurement of that food, which was purchased through ad hoc procurements:
BOP institutions independently procure the vast majority of food items, including produce, dairy, poultry and beef, through quarterly and ad hoc procurement award processes. These procurements result in weekly and sometimes daily deliveries, in accordance with the BOP’s national menu. Many BOP food vendors sell to multiple BOP institutions.
The Inspector General found multiple instances in which vendors provided substandard products and found a widespread failure to address these issues during contract administration, including the failure to conduct proper scientific testing of the food quality:
The Problem
Multiple OIG investigations have identified instances in which vendors have provided the BOP with substandard products.
For example, in 2014, the United States Attorney’s Office for the District of Colorado reached an $80,000 civil settlement with a BOP food vendor, related to ground beef that allegedly contained excess fat content in violation of contract specifications.
In 2018, the United States Attorney’s Office for the District of South Carolina indicted the owner of Flavor Pros of Allentown, Pennsylvania (Flavor Pros), a BOP food vendor that allegedly provided adulterated spices to the BOP. According to the Indictment, the spices were “diluted with undeclared filler ingredients.” In 2019, the government filed a False Claims Act lawsuit against Flavor Pros related to similar conduct.
In 2019, in the Northern District ofTexas, two individuals affiliated with West Texas Provisions, Inc., of Amarillo, Texas, pleaded guilty to charges related to providing $1 million of adulterated meat, including whole cow hearts labeled as “ground beef,” to 32 BOP institutions. The scheme involved more than 775,000 pounds of uninspected, misbranded, or adulterated meat. On February 13, 2020, the president and operations manager for West Texas Provisions were sentenced to 46 and 42 months of imprisonment, respectively, for their roles in this scheme.
During these and other OIG investigations, we found that the BOP does not have a protocol in place to ensure its food supply is safe and meets contractual requirements. We further have found that the BOP does minimal and inconsistent quality assurance inspections of food items and instead relies almost exclusively on vendors’ claims regarding the composition, quality, freshness, and weight of their products. In addition, we have found that the BOP requests laboratory testing of food items or requests the assistance of the United States Department of Agriculture’s (USDA) Food Safety and Inspection Service only when staff observes a particular issue that causes staff to suspect that the food item does not meet contract specifications. This is a potentially problematic practice as some quality issues are not easily identified without scientific testing. We also have found that the BOP does not require vendors to certify upon delivery or submission of a claim for payment that their products meet the contractual specifications and that they were processed or produced in accordance with all applicable government regulations.
Additionally, BOP does not always properly document or communicate food vendor quality issues. In several investigations, we found that a number of BOP institutions were aware that a particular vendor was providing substandard food, but the information was not appropriately documented, did not appear in FAPIIS as required by the FAR, and was not otherwise communicated to other BOP institutions or the BOP Central Office.
The report noted that a decentralized approach to procurement increased the importance of documenting and communicating instances of substandard product delivery to help with contract management and inform the evaluation of vendors in subsequent bidding processes:
BOP’s decentralized food procurement process and high volume of food procurements make documentation and communication of quality concerns particularly important. If one BOP institution becomes aware of a food vendor performance issue, that institution should ensure that this information is expeditiously documented and shared throughout the BOP to inform pre-award market research by other institutions and government officials. This pre-award research ultimately forms the basis for determining a contractor’s qualification and suitability for an award.
In fact, the Inspector General found that this failure to properly manage the contracts led to “instances where BOP food vendors attempted to ship food products to BOP institutions after the products had been rejected by other BOP institutions.” The Inspector General made a series of recommendations to address these issues, including the development of a quality assurance plan “to mitigate the risk that a vendor could deliver a substandard product”, on-site inspections prior to the acceptance of food deliveries, the implementation of a structured system of random laboratory testing of food products, and the requirement that with each delivery “vendors submit a written certification that the products meet the contract specifications and have been processed or produced in accordance with USDA, FDA, or other regulatory standards.” As this report illustrates, the failure to establish and monitor contract standards can result in the delivery of substandard goods to public institutions.
