GSA hammered on ‘outrageous’ bonuses, conference spending

By Charles S. Clark

August 1, 2012

The General Services Administration came under renewed fire at a House hearing Wednesday, at which lawmakers added a charge that the agency awarded excessive employee bonuses to the list of controversies involving overspending at conferences and awards ceremonies.

Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, continued his campaign against GSA spending practices, saying they constitute “a major crisis” and are “not a pretty picture for taxpayers.”

Mica cited July news reports from WUSA-TV in Washington and Fox News of $43 million in bonuses in fiscal 2011 for GSA employees. That amounts to 10 percent of all federal bonuses, even though the agency of 12,000 employees comprises only 1 percent of federal workers, Mica said.

“Conferences are one thing, but these bonuses are absolutely outrageous,” he added, asserting that some employees were given bonuses of $50,000 or overtime up to $140,000. The total bonuses could reach $44 million, he said.

A GSA spokesman said in a statement that the agency’s acting administrator, Dan Tangherlini, is reviewing the agency’s entire performance award system and had “already uncovered clear needs for reform.” The WUSA-TV figure for 2011 came from the Office of Personnel Management, the statement said, while GSA’s overall bonus information has been given to the Senate and made public.

GSA said it has limited individual non-Senior Executive Service bonuses to 1 percent of salary and given none to political appointees. Tangherhlini has cut executive bonuses, frozen hiring and eliminated the agency’s Awards Stores program that gave out free consumer electronics, the statement added.

Mica’s colleague, Rep. Jeff Denham, R-Calif., who chairs the panel’s public buildings subcommittee, addressed what he said were 77 conferences and award ceremonies now under review by the GSA’s inspector general and congressional staff. He ticked off by date a succession of executive orders and memoranda from President Obama requiring curbs on spending on conferences, travel and promotional items.

“GSA is “classifying some conferences as awards ceremonies to get around his executive orders,” Denham said. “They are ignoring the commander in chief, so why aren’t they being fired?”

Denham also accused GSA of bypassing Congress and breaking three laws that require it to notify Congress when it signs a lease worth more than $2.7 million. He specifically cited GSA’s recent $350 million 20-year lease for several floors of the World Trade Center in New York City as having been signed without consultation.

The approximately 70 conferences that are under review actually took place from 2005 to 2011, GSA said in its statement, and information on them has been turned over to the IG.

GSA said it had the legal authority to lease space at the World Trade Center, but had in fact sent the lease to Congress “in the spirit of cooperation and transparency. The Senate expeditiously reviewed the lease and expressed no concern,” the statement said. “The House Transportation and Infrastructure Committee had ample opportunity to review and act, and it did not.”

Denham and other Republicans speculated about a GSA conference under way Wednesday in Nashville, Tenn., on smart use of federal purchasing cards. Lawmakers said they had learned that some conference guests were staying in a $3,000 per night presidential suite and had gone on a commercial steamboat cruise, though they had no evidence participants were federal employees.

The GSA spokesman said 48 agency employees are at the conference, and none is staying in suites. The steamboat option is not on the conference agenda, GSA said.

Mica expressed disappointment that many GSA officials declined to appear before his panel, including Tangherlini, who had a family commitment. Many “second-tier GSA officials were not as cooperative as we’d hoped,” Mica said, adding GSA’s “intimidation” of companies doing business with the agency had prevented even private sector witnesses from testifying on how to improve its efforts in such areas as selling off excess federal properties.

“We will continue to pursue this mess till it’s cleaned up,” he said.

The hearing was prompted by the revelation in July that GSA’s Federal Acquisition Service had staged a $268,732 one-day awards ceremony in November 2010 for 1,000 employees at two hotels in Arlington,Va. Activities included a catered reception with live music, giveaways of time-and-temperature picture frames, and a team-building exercise involving drumsticks costing $20,000.

On Friday, FAS Commissioner Steven Kempf announced he was taking a two-month medical leave and would not be able to appear before Mica’s panel.

Inspector General Brian Miller told the panel he is continuing his investigation into the conference and he is not ready to add to any of the details already made public. He will deliver a separate audit of GSA’s executive compensation soon.

Under questioning about GSA compliance with executive orders, Miller said he didn’t believe the 77 conferences being reviewed were properly cleared in advance by the agency’s chief deputy. He said he would consider the picture frames and drumsticks given away at the awards ceremony to be commemorative items, which Obama has barred agencies from purchasing. He also confirmed that while his investigation was prompted by a referral directly from Tangherlini -- as GSA repeatedly stresses -- he also had received a five-page single-spaced letter about the conference via the anonymous IG hot line.

The one GSA witness at the hearing, Chief Administrative Services Officer Cynthia Metzler, listed reforms GSA has undertaken, including centralizing regional authority for spending and canceling 37 conferences.

“The 2010 FAS awards ceremony is another example of what the acting administrator has already recognized: a pattern of misjudgment, which spans several years and administrations,” she said. “It must stop, and that’s why acting Administrator Tangherlini has instituted several stringent new policies on spending to put an end to this waste.” Under questioning, she said expenses for the Arlington conferences, such as the event planner’s $104,000 fee, would not be approved under the new rules.

Del. Eleanor Holmes Norton, D-D.C., said she was encouraged by the steps GSA is taking. “I don’t begrudge federal workers their bonuses, but President Obama has asked them to set an example during a recession and recovery, so they must be done on a rationed basis.” She asked Metzler whether the agency had in-house staff who could to a better job of planning conferences, rather than contracting with a third party.

Metzler said it did, and in the future such requests would come through her office.

Mica and Denham invited Tangherlini to testify at one of the hearings the panel is planning this month in Miami and Los Angeles.

Rep. Donna Edwards, D-Md., spoke emotionally about a female GSA employee whom she saw burst into tears because she works hard, gets no bonuses and attends no conferences, “but her agency is in the headlines every day. GSA needs to get its house in order. We cannot take it anymore,” Edwards said. “I am disgusted.”


By Charles S. Clark

August 1, 2012

http://www.govexec.com/contracting/2012/08/gsa-hammered-outrageous-bonuses-conference-spending/57164/