Pentagon mental health contract may have been written by vendors
An effort to provide mental health services to military service members is under fire due to concerns that the companies awarded the contract to deliver the services may have written significant portions of the contract.
In August, the General Services Administration, on behalf of the Defense Department, chose Titan Corp. to provide Employee Assistance Program (EAP) services for the military. The program is funded under supplemental appropriations for ongoing operations in Iraq.
Titan is known for manufacturing combat and communications systems. The company formed a partnership with another firm, Ceridian Corp., to bid for the contract to provide mental health services. Titan planned to offer the technology to deliver such services via the Internet, e-mail and telephone.
A draft copy of the request for proposals for this work, detailing the specific requirements contractors must meet, appears to have been at least partially written by a Ceridian employee. The file properties of the Microsoft Word electronic document, obtained by Government Executive, list as the author a person whose name matches that of a senior official in Ceridian's public sector division.
Other details in the electronic document indicate it was sent via e-mail to at least one other Ceridian employee with a subject line stating it was a draft request for proposals. But the document begins with a formal heading indicating it is being issued by GSA's Federal Technology Service (FTS), a fee-for-service unit that runs information technology procurements on behalf of other agencies. The document also features an order numbering system routinely used by GSA when putting work up for bid.
Letting a potential contractor write contract requirements could violate federal law, several procurement experts said. While it's not uncommon for an agency to ask multiple offerors to submit draft requirements, it would be inappropriate to only let one firm do so and to use its suggestions as the basis for a competition, they said.
"It raises a red flag," said Steven Kelman, the head of federal procurement policy in the Clinton administration. "It urges the idea of a second look."
FTS managed the Defense procurement in its Denver regional office. FTS officials notified potential contractors in writing in June of potential conflicts of interest in the procurement "due to various Department of Defense contractors assisting with the writing of certain portions of the RFP [request for proposals]."
The version of the RFP with the Ceridian employee's name is dated June 2, 2003. The version companies ultimately bid on is dated July 23. The requirements for counseling services are identical in both versions, and the order numbers in each document are the same.
An FTS spokeswoman said the agency received the requirements from the Defense Department and put them out for bid. When a bidding company told FTS officials of the potential conflict, the agency invited all offerors to submit "a plan for mitigation" of it as part of their proposals. None did, the spokeswoman said.
One of the competitors, however, ValueOptions Inc., an EAP services company based in Norfolk, Va., protested directly to FTS on the grounds it was inappropriate to award counseling services using a contract designed to buy information technology. FTS ran the procurement as an order under a technology contract called Millennia Lite, which is held by 11 technology companies, including Titan. None of them are recognized mental health providers.
FTS awarded the contract several weeks later. Senior officials have said that because technology will be used to deliver mental health services, it was appropriate to use a technology contract. The FTS spokeswoman said senior officials, including the GSA general counsel, reviewed the decision and raised no objections.
GSA's inspector general is investigating FTS for using technology contracts to purchase nontechnological services, such as engineering and construction work. The investigation has uncovered abuses in at least two regional offices.
The Defense Department canceled a plan to award a mental health contract last year after concerns were raised that Ceridian had an unfair advantage in the competition.
The Pentagon planned to use GSA's schedules program, a set of contracts with individual vendors, but met with protests from ValueOptions, which argued that most EAP services firms would be excluded from competition.
Defense canceled that procurement and told ValueOptions it would compete the work later on a full and open basis. The following year, however, Defense enlisted the services of FTS and used the exclusive Millennia Lite contract.
Asked why the Pentagon had again opted to limit the competition, department officials said only, "procurement options were reassessed."
A spokeswoman for Ceridian declined to comment on why the company executive's name was attached to the draft RFP. She referred all questions to Titan. A spokesman there referred all questions to the Pentagon.
The Defense Department inspector general's office didn't respond to requests for comment about whether it was investigating the matter. However, an executive with an EAP services firm not involved in the bidding, Sandy Rosenberg, said she has brought the matter to the office's attention.
Rosenberg's company, EAP Consultants Inc. of Marietta, Ga., holds a contract to provide mental health services to the Army.