Our Office examined payments made by the Office for Technology (OFT), for services Avaya, Inc. (Avaya) rendered under contract C002248 during the period January 1, 2008 through December 31, 2008 and certain charges during calendar year 2009. These payments were for maintenance services on the integrated telecommunications system known as Capital Network (CAPNET). The objective of our examination was to determine whether OFT obtained maintenance services at a reasonable price. We found that if OFT officials had used information about past performance to help predict resource needs for the 2009 year, they may have been able to evaluate whether they could obtain further savings under a portion of its contract. We also found OFT may be able to negotiate a lower price for maintenance services under its next integrated telecommunications contract if it obtains and analyzes all of the relevant information available from the vendor. OFT officials agreed with one of our recommendations, but raised several objections regarding our analysis related to negotiating future cost savings.
However, we found Avaya was paid $3.5 million for services we conservatively estimated had corresponding direct costs totaling $1.2 million. We believe the $2.3 million difference suggests OFT may be able to negotiate better pricing in its future maintenance contracts.
For a complete copy of Report 2008-0311, click here.