Military counseling services will stay in place

The General Services Administration has extended a contract to provide mental health and counseling services to military service members, a move that likely will please Defense Department officials, but roil industry executives who have complained that the contract was unfairly awarded.

GSA awarded a "bridge contract" to Ceridian Corp. so that the company could continue providing services under the Military One Source project, an online resource for service members and their families to obtain various mental health and counseling services, including referrals to physicians. The contract, which took effect Aug. 8, expires in six months. At that time, GSA will hold a new competition, said agency spokeswoman Mary Alice Johnson.

The One Source contract has been subject to controversy since last year, when it was discovered that a unit of GSA made the award using a contract designed for information technology services, not counseling. The unit, the Federal Technology Service, is under investigation by the GSA inspector general for similar misuse of technology contracts in some of its 11 regional offices. FTS procures goods and services on behalf of other agencies for a fee. The Denver regional office handled the One Source contract for the Defense Department.

FTS first awarded the contract in August 2002 to Titan Corp., a weapons systems manufacturer with no previous experience providing counseling. Titan partnered with Ceridian, however, which supplied those services. That arrangement drew protests from Ceridian's competitors, who charged that FTS had unfairly limited competition. It was later discovered that a Ceridian employee may have helped write the requirements of the contract.

After the GSA inspector general examined the contract, the agency decided in June to let it expire this month.

But now that the bridge contract has been awarded, it's unclear whether Ceridian's competitors will protest again or wait to see if GSA holds a full competition in six months. Johnson said a new contract would be awarded, but she couldn't say whether it would be held under a full and open competition, or awarded as an order under an existing contract. FTS also granted a separate bridge contract to Titan to provide "program management services," Johnson said, but that contract is worth significantly less than Ceridian's award.

For the Ceridian bridge, FTS used a schedule contract for human resources services. The schedules are a menu of goods and services with thousands of companies that any agency can use. The choice of the human resources schedule will likely fuel the controversy. Before FTS first awarded One Source to Titan in 2002, the Defense Department had tried to run the procurement on its own. In that case, officials chose to use the human resources schedule, which launched an official protest from a Ceridian competitor, ValueOptions of Reston, Va., which is not a registered vendor on that schedule.

The sizeable difference in value of the new bridge contracts to Ceridian and Titan also will solidify critics' contention that the One Source contract had very little to do with information technology, and therefore shouldn't have been run by FTS in the first place. Ceridian's counseling services are valued at about $26.2 million, according to GSA. But Titan's project management duties are worth $1.1 million. That means about 96 percent of the new contract's value is for the counseling services. FTS commissioner Sandra Bates testified before the House Government Reform Committee last October that because One Source had a heavy technology component-namely that its services were delivered via the Internet-it was proper for FTS to handle the contract.

That explanation never sat well with some members. Two, Rep. Christopher Shays, R-Conn., and Rep. Tim Murphy R-Pa., who is also a psychologist, have written to Bates to voice their apprehension over how the contract has been handled. Murphy said "an inordinately large amount of money" had already been spent on the Titan deal, and he was concerned about "future management" of the One Source contract. A spokeswoman for Murphy's office said he would meet with Bates, probably in September. FTS has said that, when the bridges expire, it again will award two new contracts for longer periods of time.

GSA spokeswoman Johnson explained that, under the previous contract awarded to Titan, most of the information technology components to deliver the services via the Internet were put in place. The work that remains covers "quality control" and ensuring that Ceridian interacts appropriately with the military services, she said.

Even though most of the contract now covers mental health services, it's still appropriate for FTS to handle the deal, because the agency has recently been granted the authority to award "professional services contracts," Johnson said.

FTS' Denver office, which made the 2002 Titan award, also handled the bridge contract. No contracting officers in the Denver location were available to sign off on the deal, so a contracting officer from the Region 10 office, in Auburn, Wash., was brought in. It's not unusual for FTS to "leverage contracting officers from different regions," Johnson said, particularly if the agency is handling a number of contracting operations, as it is now.