Lawmakers say they will insist that the Library of Congress make substantial changes to its contracting operations after the release of what one Member called a “damning” report by the agency’s inspector general.

The House Administration Subcommittee on Oversight held a hearing this morning to hear testimony from senior LOC officials regarding the findings of a March audit report conducted by IG Karl Schornagel in conjunction with Jefferson Solutions consulting firm.

The report concluded that the Office of Contracts and Grants Management has not been responsible in its management of funds in awarding contracts to outside organizations providing services at the LOC. Contracting funds account for about a third, or more than $200 million, of the LOC’s overall annual budget.

The report found “numerous technical deficiencies at critical steps in the acquisition process, such as the lack of adequate planning; failure to conduct market research; [and] a gross lack of competition (of the 129 randomly selected contracts valued at $52 million, more than half were awarded noncompetitively).”

These factors, Schornagel said today, could be leading to a vast waste of taxpayer dollars.

“The library cannot claim that it is paying fair and reasonable prices for its goods and services, or even that it is not making improper or inappropriate purchase,” he told the subcommittee. “The library may very well be paying a high or unreasonable price for the supplies and services it purchase.”

The House Appropriations Committee has already stepped in. In the committee report accompanying its recently passed fiscal 2013 legislative branch appropriations bill, language specifies that the LOC must hire, contract for or detail an individual to work directly under the chief of staff to implement all 51 recommendations to address the 21 deficiencies identified.

But the House Administration Committee, which oversees Capitol Hill support agencies, wanted the LOC to know that it was monitoring the situation as well.

“Today I am interested in hearing three things: How bad is the problem, how did we get here and how are we going to fix it?” subcommittee Chairman Phil Gingrey (R-Ga.) said. “We simply can’t afford to ignore these problems.”

Schornagel said part of the problem had to do with high turnover and low staff morale. The position of chief officer for procurement has been vacant more often than not for several years, and staffers within the contracts office typically have less than two years experience and no reliable mentors or supervisors to help them gain expertise, Deputy Librarian of Congress Robert Dizard and Chief of Support Operations Lucy Suddreth said. They said this situation has contributed to a general lack of oversight of how funds are used, how contracts are awarded and how records are maintained.

Dizard and Suddreth said they were taking concrete steps to address this problem and the others identified in the report.

Dizard said the contracts office hired 19 new staff members from January 2011 to May 2012, and that there is a greater emphasis on performance management and professional development. The training program for contracting officers has also been reworked.

In addition, Dizard reported that a detailee has been assigned to oversee implementation of the report’s recommendations, as required by the House Appropriations Committee.

Suddreth added that of the 51 recommendations to alleviate the 21 deficiencies identified, 26 have been implemented already.