A General Services Administration office that was found to have misused tens of millions of dollars in federal funds "pushed the envelope" of appropriate behavior for years, according to a former GSA official.
Charles Self, who retired last month as deputy commissioner of the Federal Technology Service, said headquarters officials in Washington were rebuffed by managers of a regional field office when headquarters tried to inquire into behavior Self said was suspicious. The regional office in Bremerton, Wash., was audited by the GSA inspector general, who uncovered the abuse of funds.
The regional office "was just way out there…the most out there" of all the offices in terms of its business practices, Self said in an interview with Government Executive. FTS writes and awards contracts and manages work on behalf of other agencies in exchange for a fee. The agency subsists entirely off those fees, rather than congressional appropriations. FTS managers work in Washington, and are largely detached from the regional offices across the country on a day-to-day basis, Self said.
Managers in the FTS Bremerton office were awarding contracts for work in Virginia, even though their region covers the states of Alaska, Idaho, Oregon and Washington, Self said. Also, FTS headquarters officials noticed that the office had hired "an inordinate number" of local contractors, a "much higher ratio of contractors than other regions," based on the office's size, Self said.
When FTS headquarters officials tried to investigate these activities, they were rebuffed by the regional office, Self said. "They paid no attention at all to the central office," he said. "They just blew us off."
Self said the regional employees "put up a fake store front" and "showed us what data they wanted to show us." The GSA inspector general has found that the Bremerton office inappropriately used more than $38 million from GSA's information technology fund, a revolving account that consists of funds GSA's agency customers park for use in later budget years, and that are earmarked specifically for technology projects.
The inspector general learned that from September 2000 to October 2002, the regional office awarded construction work on behalf of the Army under the auspices of the IT fund. Government Executive first reported the audit this week after obtaining the report under a Freedom of Information Act request.
Self said that it was not the FTS headquarters' responsibility to manage daily operations in the regions. In general, "central office has very little say [about] what goes on," he said. Rather, it's up to the politically appointed GSA regional administrators to ensure that all offices in their jurisdiction are acting appropriately, Self said.
Robert Suda, the FTS assistant commissioner who oversees the Office of Information Technology Solutions at headquarters, agreed that the regional offices are largely independent. "From headquarters' perspective, we allow the regions to execute their programs as best they see fit," Suda said.
Suda wouldn't comment about Self's characterizations of the Bremerton office's activities. But he emphasized that "the responsibility for execution of [FTS] programs is with the regional administrator."
"That's a surprise to me," said Jay Pearson, the former administrator of Region 10, where the Bremerton unit was located. Reached at his office in Seattle, Pearson said he wasn't aware that the inspector general had issued an audit, and that it's FTS headquarters' responsibility to oversee their regional offices. Pearson said he left his position in January 2001, three months into the period the audit covers.
In a memo sent Thursday to all GSA employees, GSA Administrator Stephen Perry said, "I'm sure it is extremely disappointing to GSA associates to learn that we have instances of inappropriate contracting practices" at the agency.
Perry said the Bremerton field office was closed and that its personnel were reassigned after the contracting abuses were revealed. "Certain corrective action steps were taken to prevent the continuation of the inappropriate contracting practices that were discovered," he said.
A GSA spokeswoman said this week that Perry counts on FTS leaders, including Commissioner Sandra Bates, to keep abreast of what's happening in the regional offices. But Self said that Bates "has no real authority for what goes on in the regions. It's the crux of the matter" in terms of how the Bremerton office's abuses went unchecked.
Meanwhile, the GSA inspector general's audit of FTS field operations is ongoing, and extends beyond the Bremerton office. Auditors are pulling together contracts from across GSA's 11 regional offices, said Eugene Waszily, the assistant inspector general for auditing. "This is supposed to be a national assessment," he said. The audit will include, but is not limited to, use of the IT fund, he said.
Waszily didn't estimate when the review would end, but he said it would probably make specific policy recommendations, based on the evidence uncovered so far. He said his office also is expediting the audit based on that evidence.
A spokesman for Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, said lawmakers "will investigate the issues raised by the [inspector general], and other oversight issues" in the fall.
On the question of whether FTS headquarters or the regional administrators have oversight of the field office, Waszily said that has been "a long-standing organizational issue" at GSA. "The programs are shaped and defined on a national basis," he said. But "day-to-day business affairs are to be run out of the regional offices." Ideally, Waszily noted, "there should be some participation from both sides."