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The General Services Administration has required one of its contractors, which was named in an investigation of procurement abuses at the agency, to implement a plan to avoid conflicts of interest while working in a supporting role for the agency.

Employees for the firm, Information Systems Support Inc. of Bethesda, Md., work for GSA under a contract to provide administrative and acquisition support to the Federal Technology Service. They help FTS officials conduct procurements and award contracts, services that FTS performs for other agencies on a fee-for-service basis.

However, the company also has won millions of dollars in work from FTS under another contract it holds to sell information technology services. The company's employees work in offices with FTS personnel, and they have access to a government database of upcoming business opportunities.

To prevent any unfair advantage from having a company that assists the contracting process win contracts from the agency, FTS has required Information Systems Support to write an "organizational conflict of interest plan." It has also required its employees to sign a nondisclosure agreement covering information they might obtain while performing their support jobs. The requirements were part of FTS' renewal of Information Systems' support contract, which took effect Wednesday.

"Certainly the potential was there" for the company to obtain an unfair competitive advantage, said Mary Alice Johnson, a GSA spokeswoman. In 1999, when Information Systems was awarded the support services contract that expired on Sept. 30 of this year, a company employee's signature was found on a document recommending award of the support contract to the firm, Johnson said. "We cannot ascertain whether a potential conflict of interest may have resulted in an unfair competitive advantage," Johnson said.

The GSA inspector general, who is investigating FTS offices nationwide, has learned that employees at an FTS regional office in Bremerton, Wash., in which the Information Systems Support employees were working, used the company's technology contract to disguise construction and engineering work on behalf of the Army. The work was part of a project to build remote education sites for the military so personnel can take courses online.

Eric Whittleton, Information Systems Support's chief operating officer, said his company is conducting a wide-ranging review of its business practices and dealings with FTS. He said the company requires its employees to sign an ethics statement promising not to disclose FTS-related information to people inside or outside of the company.

Meanwhile, senior GSA officials testified before the House Government Reform Committee Thursday that the agency is taking steps to prevent future contracting improprieties.

GSA Administrator Stephen Perry said the Bremerton employees were reassigned to an office in Auburn, Wash., to facilitate stricter oversight of their activities. Also, FTS will have to abide by new legal review requirements, including the inspection of all new contract awards worth more than $5 million by GSA's general counsel.

Perry also said that FTS managers and the inspector general's office are gathering information about the actions of some Bremerton employees to determine if they should face disciplinary action.

FTS officials have so far found no evidence of criminal activity by any Bremerton employees, who are still performing their jobs in the Auburn office.

Perry also noted that the inspector general is conducting audits of FTS offices in Atlanta, Kansas City, Mo., and San Francisco. Earlier this week, the inspector general's office confirmed that abuses similar to those found in Bremerton have been discovered in the Kansas City office.

FTS Commissioner Sandra Bates told lawmakers it was "really too early to make [the] decision" on what kind of discipline the Bremerton employees might receive. "It could run the gamut," she said.

Bates characterized the employees' actions, which included splitting procurements to stay under certain purchasing thresholds and misusing nearly $40 million in federal funds set aside for technology purchases, as "far outside the box" and "extreme."

Committee Chairman Tom Davis, R-Va. acknowledged the employees' behavior appeared to have run afoul of regulations and standard practices. However, he said he was willing to tolerate some instances of employees "stepping over the line" in order to avoid a chilling effect on innovative contracting throughout the government.

FTS has made its reputation on quickly completing purchases for other agencies, and has developed a number of contracts that procurement experts have described as entrepreneurial.

Davis said instances like those found in Bremerton were "the price you pay trying to encourage" innovative contracting. Davis, who hails from the technology-rich corridor of Northern Virginia and is an outspoken advocate of loosening some procurement regulations, expressed his confidence in GSA's leadership and said his committee would continue to monitor the inspector general's investigation.

One committee member, though, raised a series of questions at the hearing about a recent Government Executive report on a GSA effort to procure mental health services for the military using a contract for technology services.

Rep. Tim Murphy, R-Pa., asked why the agency had awarded a broad range of employee assistance program services to Titan Corp., which sells combat and communications equipment and has no expertise in mental health.

Bates explained that technology, primarily data networks, will be used to deliver mental health services online, and said using a technology contract was appropriate because the preponderance of the work was technology-related.

Murphy, who is a psychologist, responded that "it doesn't make a lot of sense to me" why a technology firm would be tapped for the work. He questioned whether the award - valued at $229 million - was analogous to the events at Bremerton, where construction services were rolled into technology contracts.

"This looks like a $400 hammer to me," Murphy said.

COMMENTS

• "A company employee’s signature was found on a document recommending award of the support contract to the firm," Johnson said. “We cannot ascertain whether a potential conflict of interest may have resulted in an unfair competitive advantage,” Johnson said. As the lines between civil service employees and contract employees become blurred, more and more of these circumstances are going to occur that will cause changes to policy and procedures and the way government does business. I hope this serves as a hard lesson learned for GSA when it formulates evaluation plans and technical evaluation teams in the future. No contract employee whose proposal is being evaluated should ever serve on the evaluation team. Just as a government employee must recuse themselves from this very circumstance, so should contract employees. However, oversight of the evaluation and award should be incumbent upon the government officials and not the contractor to determine whether a conflict of interest exists. GovExec.com reader Posted October 8, 2003 10:40 AM
• "The General Services Administration has required one of its contractors, which was named in an investigation of procurement abuses at the agency, to implement a plan to avoid conflicts of interest while working in a supporting role for the agency." The above line is a direct quote from the article and it is a perfect example of what is absolutely wrong with the contracting practices used today. GSA is requring a contractor to implement a plan to avoid conflicts of interest. Since when do we have contractors set policy, not to mention to set a policy to correct a GSA error/problem? GSA was wrong for violating regulations and policies that tell government agencies to avoid "perceptions of conflict of interest" and GSA definitely created a "potential for a vendor to have a conflict of interest" when they created the initial statement of work and work order. GSA created the situation by violating laws to begin with and now in an effort to correct the problem, they are trying to get the vendor to implement a policy. I am not a fan of contracting out, but it really floors me to see government entities that ABUSE their authority and believe they should get away with it. Someone or everyone at a very high level in GSA should be held accountable for violating government ethics, laws, rules and regulations. Government should set policy, rules and regulations and government has to be the enforcer of the same. If government is not going to enforce policy, then why create it? Government needs to remember that if policy or laws are created and implemented, then they need to allocate more resources to ensure the enforcement. Lack of enforcement is why each and every day we see another government office or contractor who has violated or abused some regulation. GovExec.com reader Posted October 6, 2003 9:27 AM
• 'Government Oversight' has replaced 'Military Intelligence' as the greatest oxymoron of all time. GovExec.com reader Posted October 7, 2003 12:56 PM