By Jared A. Favole and Alicia Mundy
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- U.S. federal drug regulators don't adequately plan how they spend taxpayer money on information technology contracts, relying instead on deals that leave the government on the hook for higher costs, according to an inspector general report.
The report, which hasn't been released to the public, says the drug division at the Food and Drug Administration uses broad language when seeking information technology services and relies on contracts that emphasize speed and flexibility over planning and cost.
Information technology is an integral tool in the FDA's drug safety arsenal, as pharmaceutical companies are required to report serious side effects of their drugs to the agency. The FDA spent $230 million on information technology in fiscal year 2008, not including salaries and per capita costs. For fiscal year 2009, the agency will spend an estimated $50 million on information technology.
More effective information technology means the agency will be better at tracking drug safety, communicating health concerns to the public and policing the pharmaceutical industry.
"The FDA has hurt its ability to do its job and wasted precious public resources by not aggressively managing technology contracts and staying on top of necessary system improvements," said Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee.
The new report, by Inspector General Daniel R. Levinson of the Department of Health and Human Services, was prompted in part by an earlier report suggesting the FDA had botched efforts to build a new system for detecting the side effects of medicines after they go on the market. Senate Finance Committee Chairman Max Baucus, D-Mont., and Sen. Grassley requested the new report in February 2007, and the inspector general's office began investigating the FDA's handling of information technology contracts shortly thereafter.
Susan Winckler, chief of staff to FDA Commissioner Andrew von Eschenbach, said in a letter to the inspector general on Nov. 14, 2008, that the agency recently restructured and centralized its information technology infrastructure, meaning there is no separate contracting office for the FDA's drug division. The change is part of a larger IT modernization effort to enhance the agency's IT infrastructure, Winckler said.
The new report said the FDA relies heavily on "time-and-materials" contracts, where the government pays a contractor for hourly labor and material costs. These types of contracts shift the burden of cost control onto the FDA. The report recommends the FDA convert ongoing information technology deals to "fixed-price" contracts, in which a company is paid a fixed amount for performing the work and, in turn, has a greater incentive to work more efficiently to reduce costs.
The report notes that the FDA isn't alone in struggling to efficiently manage information technology services, saying spending on IT has "long been considered high risk for fraud, waste, and abuse because of the significant cost involved and insufficient planning on the part of Federal agencies."
The report recommends the FDA more clearly define its information technology requirements when searching for contractors. The report notes that using broad requirements when searching for contractors is prevalent throughout the government.
Winckler said the agency is working to improve and define its information technology requirements by adopting a new business development model. She said the agency agrees that deals for hardware and commercial off-the-shelf software should be sought using fixed-price contracts. It's unclear, however, if the agency will convert ongoing contracts. FDA officials weren't available to comment.
-By Jared A. Favole, Dow Jones Newswires; 202-862-9207; jared.favole@dowjones.com
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Publié le 08 janvier 2009 Copyright © 2009 Dowjones