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Grassley Asks For Audit of GSA's Sun Contract

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By Daniel Pulliam June 6, 2007

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Sen. Charles Grassley, R-Iowa, has asked the General Services Administration inspector general to investigate a contract extension the agency awarded to Sun Microsystems Corp. last September. Grassley wants the IG to determine if the government is getting the best deal possible for the products and services offered in the contract.

Grassley is concerned that Sun Microsystems is charging the government more for its products and services than its private-sector customers. Under the GSA schedules, Sun is supposed to provide its best price to agencies buying off the schedules.

In a three-page letter dated June 5, Grassley asked GSA Inspector General Brian Miller to provide in 30 days a preliminary report on the Sun contract's price reduction clause, which states that Sun is providing its best prices for products and services. Grassley asked Miller to file periodic reports thereafter.

The contract's price reduction clause has been a major sticking point in the renegotiating the Sun contract since 2004. Federal officials have filed complaints against Sun for unreported discounts to commercial customers and improper pricing, according to the letter. The price reduction clause in the contract extension signed Sept. 2006 was based on discounts given to all commercial customers and not just the ones receiving the best discounts, Grassley says in the letter.

Grassley has asked the IG to use Sun's sales database to evaluate how much the government has saved or if the government has paid more as a result of the new price reduction clause.

In a statement, a GSA spokeswoman said that the agency "will fully cooperate with any IG audit and listen to their recommendations just as we have always done including during the renewal of the Sun contract."

"The Sun contract extension was a good deal for the American taxpayer that was concluded after Sun provided a corrective action plan which was reviewed by the IG and approved by the contracting officer," the spokeswoman said. "The IG requested that we not pursue the allegations. All the contracting officers who negotiated it should be commended."

GSA's IG did not respond to requests for comment on this letter.

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