Government Executive - Authors - Jenny Mandel

Critic calls OMB program evaluations biased

Jenny Mandel — Fri, 22 Jun 2007 00:00:00 -0400

The Bush administration's rating tool for evaluating federal programs is subject to political bias and should be reformed to bring in more subject expertise, according to a former federal employee.

In a recent white paper circulated within the federal management community, Eric Bothwell, a 26-year veteran of the Indian Health Service and now a performance management consultant, said the Office of Management and Budget's Program Assessment Rating Tool used to grade most federal programs would itself be rated poorly on its design and effectiveness.

Bothwell said if the PART evaluation process underwent its own assessment, it would earn poor responses on two key criteria: being free from major design flaws and signs that a different approach would better accomplish the intended goals.

OMB, as an arm of the White House, is inherently ill-suited to make objective assessments of federal programs, Bothwell argued. "OMB is a politically focused organization and based on this alone, the role of evaluating federal programs is at risk of being biased by the political agenda of the administration," he wrote.

Citing his own interactions with OMB during examinations of the Indian Health Service, Bothwell said some PART questions are subjective, opening the door to bias, and sometimes generic criteria don't make sense when applied to programs with long-term or complex goals like health and social programs. When used to justify changes to program budgets, he said, the PART's skewed measures of efficiency or effectiveness can lead to unfair recommendations for cuts.

Despite his dispute with fundamental aspects of the program, though, Bothwell's recommendations to reform it work within the existing system.

OMB should modify the process to include at least three parties, he said -- adding a subject matter expert from a similar federal program and an expert on evaluation techniques from the Government Accountability Office to each review team in addition to the OMB examiner. Including GAO's perspective as the legislative branch's accountability arm would boost congressional confidence in the system, he said, potentially turning around the disinterest that appropriators have shown in PART evaluations.

"OMB has a critical and legitimate role in this effort, but they must perform it legitimately and model the standards that they hold other[s] to," Bothwell said. "It will also require them to release exclusive control of the process, collaborate with stakeholders far more, and hopefully embrace a more holistic model of performance management."

Asked to discuss Bothwell's recommendations, Robert Shea, OMB's associate deputy director for management, said, "I'm not interested in contributing to this."

But John Kamensky, a senior fellow with the IBM Center for the Business of Government who worked at GAO for years before becoming a top official in Vice President Al Gore's reinventing government initiative, said many of Bothwell's points were worth discussing.

Kamensky said fine-tuning the PART process could increase its credibility, with positive effects for agencies, the administration and Congress.

Setting PART in context, Kamensky said that before it was introduced in 2001, the OMB budgeting process relied on far less transparent evaluations. "Before the PART it was more ad hoc, it wasn't systematic, and it was secret. With the PART it has a framework, it's something the examiner has to publish publicly, and it's something the agency had a hand in," he said.

He also defended the professional objectivity of most rank-and-file OMB employees, noting that despite the office's White House link, career employees tend to keep private their political leanings.

Kamensky said that after the 1993 passage of the Government Performance and Results Act, a major milestone in the federal government's march toward program accountability, officials considered developing a separate, objective evaluation system. But one of the problems with using a more academic approach was that the results tended to be heavy with caveats and unwieldy when directing policy.

Kamensky also cited a potential barrier to implementing Bothwell's recommendations, noting the constitutionally separate roles of the executive and legislative branches in federal budget-making. If GAO were included in the program evaluations that inform the president's budget request, he said, it could be seen as congressional interference with the executive branch's budget development and decision-making process.

If the links between program evaluation and budgeting were completely severed that would resolve the separation of powers concern, Kamensky noted, but could also decrease OMB and appropriators' interest in relying on PART results.

Congress could take steps to fine-tune PART, Kamensky said, through legislation like a bill introduced in 2005 by Rep. Todd Platts, R-Pa., which would have codified much of the existing process into law. That measure was never enacted.

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Report finds federal researchers unsure of media rules

Jenny Mandel — Thu, 21 Jun 2007 00:00:00 -0400

Many federal researchers are uncertain of agency media policies and whether they can discuss the policy implications of their work, according to a new study that calls on agencies to clarify their guidelines and boost training.

In a study of media and publication policies at NASA, the National Oceanic and Atmospheric Administration and the National Institute of Standards and Technology, Government Accountability Office reviewers found that only two-thirds of researchers surveyed were confident that they understood policies on media interviews and press releases well enough to comply with them. Nearly half were confused about whether they were allowed to talk about the policy implications of their research.

GAO estimated that only 6 percent -- or about 200 -- of researchers at the three agencies had been denied requests to disseminate research results during the past five years. Some were told the denial was due to the sensitivity of the issue or security concerns, while others were not given a reason. In some cases, though, the researchers were subsequently granted requests to publicize their research through an alternate route, like substituting a peer-reviewed publication for giving a talk at a conference.

The survey results come as the Commerce Department, which houses NOAA and NIST, nears conclusion of a major overhaul of its media policy that officials say will make it more understandable for researchers and will help communication with the press.

The new policy should address GAO reviewers' concern that "Commerce's policies that apply to requests for media interviews and press releases have not been revised for over 20 years, are unrealistic and may hinder dissemination efforts." GAO expressed a similar view of NOAA's policy, which the report described as "unclear" and possibly an impediment to dissemination.

Those who want to provide "personal opinions that go beyond scientific conclusions based on fundamental research related to their jobs" must do so without using government resources such as their telephone, office or time at work.

Commerce spokesman Richard Mills said NOAA rescinded its old policy in May and is working on an update that will likely be complete this summer. The new policy was supposed to be fully implemented following a 45-day training period that ended in May, but Mills said his office is still working on responses to criticisms from Congress and watchdog groups, including that researchers are not guaranteed a final review of work published in their name and that whistleblower protection issues are not clearly spelled out. Critics also would like to see more transparency on the basis for denied requests.

Mills said the Commerce policy will not be finalized until after the NOAA one is complete, but noted that his office is working with critics and said he expects the issues will be resolved. He said office procedures provide researchers with final review of press releases and other products on their work, and that he is looking for a solution to the whistleblower protection concerns that will not involve too much legal jargon.

Despite GAO's recommendation that agencies provide formal training to ensure that managers, researchers and public affairs staff are well informed of the relevant policies, Mills said Commerce would probably not need another dedicated training period once the new policy is finalized.

In management comments on the report, officials at NASA, Commerce, NOAA and NIST generally agreed with GAO's recommendations that the agencies clarify policies, boost training and ensure that there is a clear appeals process for denied requests.

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Bill aims to enhance independence of inspectors general

Jenny Mandel — Wed, 20 Jun 2007 00:00:00 -0400

Current and former inspectors general on Wednesday supported legislation aimed at strengthening the independence of IGs.

The measure (H.R. 928) introduced by Rep. Jim Cooper, D-Tenn., would update the 1978 Inspector General Act and mirrors similar measures presented over the past five years. The latest version comes amid a wave of recent battles among inspectors general, agency heads and congressional overseers at NASA, the General Services Administration and the Commerce Department.

Under provisions designed to enhance independence from agency heads, the legislation would set renewable seven-year term limits for IGs and stipulate that they could only be removed from office for a list of offenses including malfeasance, neglect of duty and "inefficiency."

The measure would also codify an existing IG oversight group, the President's Council on Integrity and Efficiency, into a statutorily chartered council and would allow it to submit independent budget requests to supplement those forwarded by agency heads. In addition, it would close a pay loophole under which career employee IGs often are capped at a pay grade below that of their top subordinates, by ensuring that IGs are considered at the level of agency senior staff members.

Two current and three former inspectors general, as well as witnesses from the Government Accountability Office and Congressional Research Service, weighed in on the measure at a hearing before a House Oversight and Government Reform subcommittee, providing generally positive feedback. Several expressed reservations about term limits, saying they could introduce a "lame duck" mentality. One witness said career civil servants could hesitate to take a seven-year job at the relatively low pay rates in effect for IGs.

Several supported an alternative that would not impose a term limit but would require that agency heads give Congress 30 days notice of the intention to remove an inspector general, though some said the strategy would be meaningless unless Congress had clear power to act on such a notice.

The idea of legislating "removal for cause" language for IGs won less support, with some witnesses expressing reservations that justifications included in the draft bill -- such as "inefficiency" -- were not clear or did not include all the concerns that could make an IG's performance unacceptable.

Clay Johnson, the Office of Management and Budget's deputy director for management and the head of both IG oversight groups, took issue with the idea that IGs do not always perform to their maximum capacity. "I've never heard a report that an IG's work is less than it can or should be," Johnson said during an exchange in which Rep. Brad Miller, D-N.C., expressed frustration that NASA IG Robert Cobb has not been fired in light of an investigation that found problems with his performance.

Johnson said the President's Council on Integrity and Efficiency's investigative procedures need a review, but he opposed several of the provisions in Cooper's proposal, including term limits and the ability of IGs to submit separate budget requests.

Johnson expressed skepticism about the idea that IGs require greater independence. Arguing that the interests of agency heads and IGs reflect the shared goals of uncovering problems and making the agency better, Johnson said, "I just don't agree at all that there's pressure to hide things that don't work."

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OMB claims progress in disposing of unneeded real estate

Jenny Mandel — Mon, 18 Jun 2007 00:00:00 -0400

An Air Force fueling complex in Norwalk, Calif., a maintenance shop in Yaounde, Cameroon, and a group of General Services Administration warehouses in Fort Worth, Texas, are among 130 properties prioritized by federal agencies for disposal.

In a new listing of excess federal real estate properties called for under a 2006 law, the Office of Management and Budget released the top properties for disposal. There are 76 domestic and 54 overseas properties.

The 130 properties have a combined replacement value of $362 million, and are just the highest priorities among about 500 executive branch properties worth $935 million that are for sale, according to OMB.

"Agencies have made great progress in more effectively managing our real property assets, but today's report shows the volume of unnecessary properties is such that agencies need additional tools to more effectively manage their real property," said Clay Johnson, OMB's deputy director for management, in releasing the report.

In addition to the properties already on sale, OMB identified about 21,000 properties worth $17.7 billion that have been listed by agencies as unneeded and as potential candidates for transfer, sale or destruction.

The vast majority of those are owned by the Defense Department, with the Navy and the Army responsible for $6.5 billion and $4.7 billion in assets, respectively, while the Energy Department came in third with $2.7 billion, followed by the Air Force with $1.4 billion.

OMB Controller Linda Combs said she hoped the report would stimulate congressional interest in a proposed pilot program that would allow agencies to retain 20 percent of the net proceeds from property disposal. Currently, agencies have little incentive to shed unwanted properties because disposal costs like marketing and any necessary environmental cleanup come out of their budgets, while in most cases any revenue is turned over to the treasury.

Ray Summerell, vice president for corporate development at Herndon, Va.-based VISTA Technology Services Inc., a company that provides real property services to federal agencies, said OMB's list represents a good start but falls short of what officials need to make good decisions about real property disposal.

"I would not want to be making spending decisions on the overall portfolio based on the quality of data that's there today," Summerell said. He said the asset replacement values collected by OMB are easier to come up with than market values but are not nearly as useful, since officials generally are not interested in replacing the properties identified for disposal.

He said agencies also lack hard data on costs, such as heating and repairs, associated with occupying a building. Without that information, managers cannot make sound decisions on whether the government is best served by maintaining a facility or finding an alternative.

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House investigators seek Justice probe of NASA general counsel

Jenny Mandel — Fri, 15 Jun 2007 00:00:00 -0400

House lawmakers this week requested a criminal investigation into the possibility that NASA General Counsel Michael Wholley destroyed government records and obstructed justice.

In a bipartisan letter signed by the chairman and ranking member of the House Science and Technology panel's investigations subcommittee, lawmakers asked the attorney general to investigate whether Wholley broke any laws when he destroyed all DVDs of an all-hands meeting between NASA Administrator Michael Griffin and inspector general office staff.

At a May subcommittee hearing, Wholley testified that he broke the disks in pieces and threw them away, shortly after the agency chief of staff collected all known recordings of the meeting. Griffin had called the meeting to discuss an IG group investigation that found the appearance of a lack of independence in Inspector General Robert Cobb's close relationship with the administrator. The investigation did not find evidence of an actual lack of independence.

In their letter, Reps. Brad Miller, D-N.C., and James Sensenbrenner, R-Wis., claimed that Wholley had known since at least February that the committee took an active interest in the matter. A week before the April 10 inspector general staff meeting, Wholley allegedly sent an e-mail to an Office of Management and Budget official titled "Hearings??" on the possibility of the administrator's appearance before the subcommittee.

"Wholley's knowing destruction of sensitive records in his possession was a great detriment to our committees' investigations," the letter stated.

The lawmakers rejected Wholley's argument that the recordings were not yet government records when he destroyed them, citing a Federal Records Act definition of "record" as "All books, papers, maps, photographs, machine readable materials … preserved or appropriate for preservation by [an] agency or its legitimate successor as evidence of the organization, functions, policies, decisions, procedures, operations or other activities of the government."

Justice Department spokesman Erik Ablin confirmed that the request had been received and said, "As with any allegation of criminal misconduct, investigators would review the matter."

Ablin declined to say how long it would take to reach a decision on whether to investigate, but noted that in either case the department does not confirm the existence of ongoing investigations. A committee spokeswoman said aides did not yet have a sense of whether Justice officials were likely to pursue the case.

From e-mail records obtained by the committee, Wholley appeared to know as early as March that he could become the focus of a firestorm. "Sorry to drone on so long," he allegedly wrote to a colleague at the end of an e-mail regarding a strategy for responding to the IG group's report on Cobb. "There's a lot here and I want to ensure that the [memo for the record] covers the advice we provided to the administrator so that if it hits the fan, I am in the crosshairs, not him! I am expendable; he aint!!(sic)"

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Group argues for shielding contractors’ revenue, employee counts

Jenny Mandel — Thu, 14 Jun 2007 00:00:00 -0400

An association representing federal contractors has requested that key data related to company size be withheld from the public, a measure that watchdog groups say would restrict access to important information.

The Professional Services Council, an Arlington, Va., group representing government service contractors, made the request in response to a notice of the pending release of information on all companies included in the Central Contractor Registration database. Undisclosed parties sought the release of the information under the Freedom of Information Act, according to the notice.

In its comments, PSC asked that three fields -- annual revenue, a company's number of employees and a company-specific identification code -- be excluded from publication, along with other fields such as bank account and routing numbers that the Defense Department office managing the registry has said are exempt from disclosure.

PSC argued that a company's revenue and number of employees are not important to the public. "The annual revenue number provides no useful information to the public; nor does giving the public access to this information assist the public in determining whether a firm is a 'small business' under the disclosed [industry classification] code since the determination is made on a contract-by-contract basis," wrote Alan Chvotkin, senior vice president at PSC, in a comment letter.

He similarly argued that the "average number of employees" field provides no useful information.

Some watchdog groups disagree, however, arguing that disclosure of those two fields is critical to letting the public verify a company's official size status. Under governmentwide acquisition rules, a company's right to classify itself as small for a particular contract -- potentially making it eligible for preferential treatment in the bidding process -- depends on the industry and either the business' revenue or the number of employees.

Scott Amey, general counsel of the Washington-based watchdog group Project on Government Oversight, said the information is currently available through another major contracting database, the Federal Procurement Data System.

"Certainly, losing that information would be a step backward in overseeing contracts awarded to small businesses," Amey said. "Access to contractor data adds a layer of accountability and transparency that taxpayers will lose if more data is shielded from them."

Amey acknowledged that while publicly traded companies already disclose revenue data, some private companies might prefer not to disclose that information. "Some privately held contractors might have a case, but receiving taxpayer dollars comes with certain duties. Accountability and transparency should prevail over corporate demands," he said.

Lloyd Chapman, president of the American Small Business League and a frequent litigant in cases alleging that large companies fraudulently misrepresent themselves as small, said government officials have sought to withhold the employee and revenue information to cover up a pattern of inappropriately awarding contracts to large firms.

In a December 2006 press release, Chapman's group highlighted what it said was a change to the contractor registry.

"On Tuesday, Dec. 12, 2006, the government revoked access to information that allows the public to determine the small business status of federal contractors within the Dynamic Small Business Search of the Pentagon's Central Contractor Registry," the group said. "Around 3 p.m. Pacific time, information on company revenue and number of employees suddenly disappeared from company profiles. In its place, this message was posted, 'A firm's actual revenues and number of employees are not releasable under the Freedom of Information Act.'"

Chapman believes the change was related to an investigative piece he was working on with a broadcast news group, which he says was subsequently canceled.

In the Federal Register notice announcing the pending database publication, though, officials identified 44 of the database's 194 fields that would be withheld due to exemption from FOIA. The revenue and employee fields were not among them.

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IRS cites lack of resources to review potential fraud cases

Jenny Mandel — Wed, 13 Jun 2007 00:00:00 -0400

The Internal Revenue Service is not prepared to handle the heavier workload that would result from aggressively pursuing cases of refund fraud, an agency official said in response to a new audit report.

The audit of the IRS Questionable Refund Program by the Treasury inspector general and the response point to resource shortages that threaten the agency's ability to pursue low-value cases of tax cheating even when they are relatively simple.

The IG office reviewed changes to the program instituted before the 2006 filing season to address congressional and taxpayer advocate concerns over a backlog of cases in which taxpayers were not notified when their refund was frozen -- in some cases for several years -- because of fraud concerns.

The changes limited the duration of the freezes, but the IG office said that resulted in the issuing of nearly $15.9 million in potentially fraudulent refunds.

"The IRS reacted to legitimate congressional concerns that taxpayers were not being notified when their refunds were delayed, sometimes for years," said Russell George, Treasury's inspector general for tax administration. "Unfortunately, the IRS overreacted, and it is costing taxpayers millions of dollars."

The IG office made seven recommendations for how to better balance taxpayer rights with the need to verify refunds that appear fraudulent. But in a response, Eileen Mayer, the agency's criminal investigations chief, agreed to only three of those, with two requiring just a renewed effort at activities already under way.

Mayer partially agreed with a recommendation that IRS go back to automatically placing a freeze on subsequent-year returns of accounts where potential fraud was identified. "The IRS will consider the … recommendations, as well as any trade-offs that would have to be made against other enforcement priorities in order to work [on] the additional inventory that would result," she wrote.

A recommendation that IRS lower the threshold for referring cases for further examination met with similar concerns. "While the IRS would like to address all cases of potential noncompliance, IRS enforcement resources are limited," Mayer wrote. "Each year, top IRS management makes carefully thought out business decisions about how to deploy these resources. Trade-offs must be made among competing priorities of which [this program] is one among many."

Mayer said that with new changes made to the program for the 2007 filing season, including replacement of a computerized fraud screening program that was offline in 2006 due to programming delays, the agency would evaluate the system before making decisions on certain of the recommendations.

The shortfalls Mayer described mirror issues that have also surfaced with a controversial initiative to hire private debt collection firms to handle some simple tax debts.

Critics contend that collecting taxes is inherently governmental work that should not be outsourced, and that putting taxpayer information in the hands of contractors poses risks to information security.

IRS Commissioner Mark Everson concedes that having agency employees collect the debts is more cost-effective, but says the agency does not have the resources to deal with those relatively low-value cases. If more personnel were hired, he would prefer to assign them to more lucrative cases, he has said.

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VA official says bonuses needed to retain top executives

Jenny Mandel — Tue, 12 Jun 2007 00:00:00 -0400

Lawmakers on Tuesday challenged the Veterans Affairs Department's award of $3.8 million in bonuses to senior executives in fiscal 2006 even as the department's case backlog grew, but a senior official defended the awards as crucial to retaining public servants who would be more richly rewarded in the private sector.

Members of a House VA oversight committee questioned the award of performance bonuses to 87 percent of Senior Executive Service members eligible to receive them in fiscal 2006. The average amount was $16,606, the highest of any agency and about $2,000 above the governmentwide average.

"While the bonus dollar amounts under discussion are sizable, they are paid to seasoned and successful executives in recognition of solid and significant contributions to public service," VA Deputy Secretary Gordon Mansfield told lawmakers. "And they pale in comparison with compensation and bonuses common to executives with similar credentials working in the private sector."

In a lengthy question and answer session, lawmakers directed few questions to a Government Accountability Office finding that officials at VA headquarters received, on average, $4,000 more than their field office counterparts. But they questioned VA's reliance on performance review boards consisting of career officials to decide on individual bonus awards, saying the system was subject to abuse by board members who might "take care of" their peers with the expectation of benefiting themselves.

Mansfield said the review board members do not make decisions on their own bonuses or those within their chain of command.

In a recently completed Office of Personnel Management review of VA's performance management system for senior executives, which Mansfield submitted to the committee for the record, investigators found that the system generally functions according to OPM standards.

OPM recommended VA officials ensure that performance plans "focus at least 60 percent on achieving measurable results," and urged a revision to the review board process to ensure that that bonus awards are more geared toward measurable results.

At Tuesday's hearing, lawmakers also questioned instances in which bonuses were awarded despite highly publicized failures, including two occasions in 2005 when the agency required emergency supplemental funding following mistakes accounting for expenditures related to fighting in Iraq and Afghanistan.

Flanked by five high-ranking subordinates, Mansfield repeatedly said he would answer questions about individual cases in a later written response because he did not have enough information at hand.

Carol Bonosaro, president of the Senior Executives Association, which represents senior career officials, said it was unfair to attack civil servants for failures stemming from political decisions to underfund the agency.

"Concerns with Bush administration decisions to request less money than is believed to be needed for VA health care and claims processing should be directed at the administration's policy-makers, not at the career senior executives who implement their decisions," Bonosaro argued.

Pointing out that VA officials often make less than half the pay of their private sector counterparts, she stressed that bonuses are not "lavish frills" but an important part of the compensation system.

Rep. Timothy Walz, D-Minn., a former serviceman, said the panel's questioning was not intended to denigrate the contributions of agency personnel. But "bonuses have nothing to do with pay parity," he said. "If this is about pay parity, ask Congress, ask us to fix this."

Bonosaro acknowledged that bonuses are not intended to address pay disparities, but said that with tight budgets, agencies have increasingly relied on them beyond rewarding top performers. She also defended the high rate of awards, saying it was appropriate that the vast majority of officials who reach the top management ranks would be above-average performers.

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Official says GovWorks can handle loss of Defense business

Jenny Mandel — Mon, 11 Jun 2007 00:00:00 -0400

Officials with GovWorks, a fee-funded Interior Department contracting operation, said it can withstand the loss of much of its business in the face of a Defense Department suspension of large purchases.

"Can it survive? Yes," said Doug Bourgeois, director of Interior's National Business Center, parent of GovWorks. "The future will determine ultimately how successful we are in sustaining the business," he said, noting that large Defense awards currently make up between 50 percent and 60 percent of the contracting shop's work.

Defense officials have ordered that "no interagency agreement in excess of $100,000 be accepted by GovWorks Federal Acquisition Center … unless a determination has been made in writing" by the Defense undersecretary for acquisition, technology and logistics that the purchase is in the interest of the department.

Defense procurement chief Shay Assad, in a May 31 letter to an Interior official uncovered by Federal Computer Week, said funds already forwarded to GovWorks for contracts exceeding the threshold but not yet committed should be returned to the department.

In the letter, Assad expressed disappointment with GovWorks' poor response to criticism of its contracting practices in a January Defense inspector general report. "As requested previously, DoI must cease the practice of advanced funding and must comply with DoD's policy of 'no advance' payments with respect to all interagency agreements," Assad wrote.

Bourgeois said GovWorks is legally allowed to take payment when a customer makes the initial agreement to place a contract, before it begins the process of soliciting and then awarding a contract. But under Defense policy, funds cannot change hands until later in the process, to prevent a contract from being listed as an undelivered order, he said.

GovWorks has worked closely with Defense officials since February to address the problems identified in the report, Bourgeois said. He said he feels confident the changes already implemented will resolve Defense officials' concerns.

Assad was traveling Monday and could not respond to questions.

Bourgeois said the intent of the change was apparently to make it more difficult for Defense program managers to "park" funds at a contracting shop past the time when they would expire if left in Defense accounts. The department ran into trouble with that practice in a highly publicized case with the General Services Administration, which ultimately resulted in the return of between $1 billion and $2 billion in unspent funds to the Treasury.

Bourgeois said GovWorks has seen a steady decline in Defense business over the last two years, since the department began requiring an explicit justification for orders placed through outside contracts, but that the latest announcement would not devastate the office.

He said some flexibilities already had been used over the past two years to reduce costs, but that he has additional room to maneuver by cutting back on GovWorks contractor support or temporarily shifting resources from GovWorks to one of four other contracting operations.

"You can only go so far, though, so the future remains to be seen as to how much business and demand there is for this particular operation," Bourgeois said.

Asked about the trend at GovWorks and the embattled position of Treasury's FedSource, which officials have said they intend to relocate to a new host agency, Bourgeois said he does not think contracting shops will be shutting down entirely.

Rather, he expects to see them focus increasingly on core business areas important to their host agency or in which they have particular specialties. "What I'm seeing, and I think other contracting organizations will follow suit if they haven't already, is there's just not enough demand to be all things to all people," he said.

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NASA inspector general rejects allegations, claims independence

Jenny Mandel — Fri, 08 Jun 2007 00:00:00 -0400

NASA Inspector General Robert Cobb defended his performance as "uncompromised" during a joint House and Senate hearing Thursday in which lawmakers hammered away at his record of consulting closely with the agency head, restricting the scope of investigations and verbally abusing his staff.

Before a House science investigative committee and the Senate committee with jurisdiction over NASA, former senior IG officials testified that Cobb had impaired their work by interfering with its scope or outcome.

Kevin Carson, who directed NASA safety and security audits before leaving the office in 2005, testified that Cobb informally shared audit results with NASA Administrator Michael Griffin before they were complete and killed productive audit projects out of concern that they would embarrass the agency.

"By constantly writing and rewriting audit reports, not allowing audits of potentially controversial issues to be performed or reports of completed audits to be publicly issued, constantly denigrating the audit staff in public and in private [and] intimidating auditors and staff through the use of verbal threats, foul language and intimidating gestures, Mr. Cobb showed that he lacked independence from agency officials," Carson told lawmakers.

Debra Herzog, who was a deputy assistant secretary for investigations under Cobb until she moved to the Postal Service in 2005, recounted two cases in which the IG initially blocked the execution of search warrants issued in cooperation with Justice Department attorneys. In one case, a three-day delay in executing the warrant could have allowed the subject to remove relevant evidence, she said.

Lance Carrington, a former assistant IG for investigations, said he left NASA after Cobb told him point-blank that he would rather Carrington not pursue investigations.

Asked to respond to the allegations, Cobb defended his performance and said a recent investigation into his actions by the President's Council on Integrity and Efficiency, a committee of inspectors general charged with overseeing their peers, was full of errors.

That committee report concluded that Cobb had abused his authority, created an appearance of a lack of independence and not adhered to a series of quality standards for inspector general offices. But it did not make recommendations regarding Cobb's continued tenure or appropriate follow-up actions, deferring to Administrator Griffin to determine an appropriate response.

When Griffin indicated that his primary response to the report would be to send Cobb to a management training course, James Burrus, the chairman of the investigating committee, responded in a letter that that punishment would be insufficient.

"All members of the committee believe the proposed course of action recommended by the administrator of NASA was inadequate to address the conduct of IG Cobb," Burrus wrote. "All members further believe that disciplinary action up to and including removal could be appropriate."

"Today, for the first time, I am responding publicly to unjustified allegations against me," Cobb told lawmakers. "The [PCIE's Integrity Committee] did not suggest that any matter covered in the wide-ranging investigation was mishandled by the NASA OIG. But the conclusions the IC did reach were as flawed as the investigation on which they were based, and are demonstrably invalid."

Cobb defended consulting with the NASA chief on ongoing work, noting that inspectors general report to and are under the supervision of their agency heads. Before he took office and established a good working relationship with the administrator, he said, the IG office had between 400 and 500 outstanding audit recommendations. "While the OIG was making recommendations, they were not being implemented, in contrast to what has occurred during my tenure as IG," Cobb said.

With respect to charges that he lacks independence, Cobb told lawmakers, "There is no work in our office that has been compromised in any way, shape or form."

Sen. Claire McCaskill, D-Mo., a freshman senator who was an elected auditor for the state of Missouri before joining Congress, expressed outrage at Cobb's record and said his decisions to hold back the results of controversial audits amounted to a waste of taxpayer dollars.

McCaskill raised the question of whether Cobb's forwarding of advance audit results to administration officials would constitute a punishable violation of the "yellow book" of government accounting standards.

Sen. Bill Nelson, D-Fla., and Rep. Brad Miller, D-N.C., refused to accept Cobb's defenses and charged that he cannot operate effectively absent the confidence of his staff and Congress. As an example of his conflicted interests, Miller questioned whether Cobb could reasonably be asked to investigate charges that his general counsel had improperly destroyed videotapes of a meeting with IG staff on the results of the PCIE investigation.

"You certainly can ask," Cobb replied, drawing chuckles from around the hearing room.

Despite lawmakers' clear antagonism, they do not have the authority to remove inspectors general from office, and Cobb told reporters following the hearing that he did not intend to resign.

On Friday another IG who has come under congressional and PCIE scrutiny on allegations of travel fraud and other charges resigned.

Johnnie Frazier, who was the subject of open investigations by the Office of Special Counsel, the PCIE and the House Energy and Commerce Committee, said he would retire effective June 29. In an e-mail to staff, he described his "disappointment and outright sadness at leaving Commerce in the midst of controversy."

"It seemed plain that Mr. Frazier was in deep trouble, so his departure is hardly a surprise," said Rep. Joe Barton, R-Texas, in a statement. "Inspectors general are the people we trust to gauge honest behavior in others, and it seems clear that Mr. Frazier was unfit for the job. He was the cause of ethical problems instead of the cure."

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NASA contract workers threaten strike

Jenny Mandel — Thu, 07 Jun 2007 00:00:00 -0400

Stalled labor negotiations at the Kennedy Space Center could lead a group of contract launch workers to walk off the job on Sunday, but representatives of all parties said a strike would have a minimal effect on a launch scheduled at the east Florida site for Friday.

The International Association of Machinist and Aerospace Workers, which represents 569 launch workers, reached an impasse at the start of June in contract negotiations with United Space Alliance, a joint venture between Boeing Co. and Lockheed Martin Corp. that holds a major shuttle contract.

Citing differences over pay, pensions and health insurance, union representative Johnny Walker said the group announced its intention to cancel its bargaining agreement, effective early Sunday morning, following a five-day cooling-off period.

Walker said the launch workers primarily are responsible for loading the shuttle onto the launch pad, with some additional duties related to maintenance and water and electrical systems, and some workers posted in California and overseas to retrieve the shuttle in case it lands far from Cape Canaveral. Many of the jobs require special certifications, he said, such as licenses for operating overhead cranes that move shuttle parts.

Defending union members' dedication to the shuttle's success, Walker said, "For the shuttle that's up to launch Friday, they're done."

He stressed that many of the union members have worked on the shuttle for years under various contractors. "This is our life; it's always been our life. We did this a long time before United Space Alliance came in here," he said. "We believe in the program; we support the program 150,000 percent."

United Space Alliance spokeswoman Tracy Yeats said some workers have additional duties such as sound suppression immediately following the launch, but she said the company has contingency plans in case of a strike.

"We're prepared to maintain critical path shuttle processing using nonunion technicians, engineers and managers . . . that have been identified as possessing the experience and certifications for the tasks that they'll be assigned," Yeats said. She said additional subcontractors would supplement company employees to handle the workload.

Walker said a strike would go on "as long as it takes," but he expressed doubt about the company's ability to bring in qualified replacements. Both sides said they were open to resuming talks.

Both also agreed that the timing of the launch and possible strike is coincidental, with the union deal driven by when the three-year contract was originally signed and the launch pushed to June by an unexpected hailstorm that damaged the shuttle just before a March launch attempt.

NASA spokesman William Johnson downplayed the significance of the strike threat. "This is kind of routine; we've been through these things before," he said, noting than an agency labor representative was monitoring the situation.

Johnson said there is an 80 percent likelihood that the shuttle will take off Friday based on weather predictions, and that Saturday and Sunday conditions are also promising.

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Labor employees rally against outsourcing decision

Jenny Mandel — Wed, 06 Jun 2007 00:00:00 -0400

Labor Department workers rallied in front of the Capitol building Wednesday, protesting the agency's decision to outsource 250 administrative jobs.

Union leaders with the American Federation of Government Employees said they had taken initial steps in filing a lawsuit alleging race-, gender- and age-based discrimination in the decision. Of the affected employees, 81 percent are women, 73 percent are African American and more than 55 percent are 40 or older, the union said.

Alex Bastani, president of the AFGE local bargaining unit that represents the affected employees, said the public-private competition process, governed by the Office of Management and Budget's Circular A-76 rulebook, is unfair and disproportionately affects minority employees.

He said the local bargaining unit has filed an institutional grievance that will be reviewed by Labor's Office of Labor Management Relations and then possibly proceed to binding arbitration. If the employees are not satisfied with the result of the arbitration, the case could go before the Federal Labor Relations Authority and then potentially before a federal appeals court, he said.

"I'm confident we can win at the binding arbitration, but if it's necessary to go beyond that, we will," Bastani said after the rally.

Under last month's award decision, Labor will pay Reston, Va.-based GAP Solutions Inc. $71 million over five years to perform the work of about 330 people, though only 250 of those positions -- 100 administrative positions at Labor headquarters in Washington and about 150 positions at field offices -- are currently filled, Bastani said. GAP Solutions is a Small Business Administration-certified, minority-owned small business, according to a small business contracting Web site.

Bastani said the competition process at work in this case was flawed and that under A-76 procedures, two of the offices at which positions were placed up for competition should have been excluded because they were undergoing reorganization.

He said President Bush's recent signing of a law that bans public-private competitions at the Labor Department's Mine Safety and Health Administration should halt the outsourcing of MSHA administrative positions included in the GAP Solutions award. The law was passed in late May, however, about two weeks after the contract decision date.

A Labor Department official confirmed that a grievance has been filed and that the complaint will progress according to terms in the union's collective bargaining agreement.

The contract is just the third in 26 public-private competitions completed by the Labor Department since 2003 to be awarded in favor of the private sector, an agency official said. "Our employees do an excellent job competing," he added.

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Speed of FAA outsourcing could jeopardize savings

Jenny Mandel — Tue, 05 Jun 2007 00:00:00 -0400

Savings from a massive transition of aviation service stations to contractor operation could fall short during a critical move to consolidate facilities, according to a recent report from Transportation Department auditors.

In an interim report on an audit announced by the Transportation inspector general last year, reviewers warned that an "extremely aggressive consolidation schedule" requires the contractor to convert the Federal Aviation Administration's 58 flight service stations into three hub stations and 16 refurbished locations and complete, test and implement a specialized new operating system to link those locations, all within a six-month time frame.

"We found that FAA has implemented effective controls over the initial transition of flight service stations to contract operations," the auditors wrote. "It is uncertain, however, if the controls put in place by FAA will be sufficient to ensure that anticipated savings are achieved during the next and most critical phase of the transition."

Last year, the IG office cited the enormous scope of the conversion as a basis for the decision to undertake the audit. The move to private sector performance was announced in 2005, following the largest-ever civilian public-private competition. The contest to perform the work of about 2,500 federal employees was completed under Office of Management and Budget's Circular A-76.

In awarding the service station contract to Lockheed Martin Corp., FAA projected it would save $2.2 billion over 10 years.

Auditors said several aspects of the plan could affect projected savings. Calculations were based on sticking to a tight six-month conversion timeline, which began in February and runs through July, but the new operating system for the facilities already has been hurt by a 10-month delay during development and FAA officials warned of another possible six-week delay that could have a "cascading effect" on the overall plan.

On a Lockheed Martin Web site dedicated to the flight service stations, a schedule for facility openings and closings lists the last of the refurbished facilities coming online at the end of July. The schedule was updated Tuesday and is marked "revision 7," with a note that "it is not anticipated" that the dates will change.

Auditors said delays could subject Lockheed or FAA to extra costs for items such as extending building leases or added maintenance on legacy systems, though they did not estimate how much this would reduce savings. While responsibility for those higher costs would depend on the source of the delay, auditors said it was likely that FAA would pay a portion.

Lockheed already has requested $177 million in contract adjustments, auditors said, with $147 million of that linked to what the contractor says were problems with the agency-provided labor rates on which it based its bid. A Lockheed spokesman said the company is working with the FAA to resolve the issues identified by the IG.

FAA spokesman Paul Takemoto said he could not comment on the contract adjustment because it is an ongoing legal matter. Of the current status of the service center transformation, he said, "The consolidation is pretty much on schedule, [though] some facilities are delayed a few weeks to better use their resources and improve familiarity with the new system."

The auditors also found service deterioration related to the conversion. The flight service stations provide information and assistance to general aviation pilots, including helping pilots who are lost.

"Staffing levels at outsourced facilities were lower than what the contractor anticipated, resulting in some users being routed to adjacent facilities that did not have adequate local knowledge needed by those users," the IG found. Lockheed said the lower staffing levels stemmed from faster-than-expected attrition both at service centers slated for closure and at those that would remain open.

Critics of outsourcing, including federal labor unions, warn that the system is subject to manipulation by companies that make overly optimistic promises regarding staffing or service levels in order to win an award, knowing they can request more money later.

The Transportation IG office made several recommendations, including that FAA ensure the contractor has contingency plans in case the transition is delayed and that the agency establish a way to monitor customer service that would be independent of Lockheed.

FAA officials agreed with those suggestions, but did not concur with a recommendation that they ensure the contractor has sufficient, and sufficiently certified, personnel at individual facilities. FAA officials argued that existing performance metrics are sufficient to oversee service levels.

Auditors were unconvinced, however, and noted that most of the metrics are based on timeliness of the centers' responses rather than the availability of relevant specialists. Auditors said they would report later this year on an FAA document comparing expected and actual costs from the first year of contract transition.

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Size of contracting workforce holds steady

Jenny Mandel — Mon, 04 Jun 2007 00:00:00 -0400

The federal acquisition workforce grew almost imperceptibly during the past year, far short of the contracting growth rate, according to new government data.

Office of Personnel Management data analyzed by the Federal Acquisition Institute showed that the number of procurement professionals in government rose just less than 1 percent in fiscal 2006, to 59,997 from 59,477 in fiscal 2005.

Future retirement eligibility remains a threat, the figures indicated. About one federal acquisition professional in eight already is eligible to retire, and that will rise to more than half the workforce by 2016, according to the data.

Agencies typically see only a fraction of eligible retirees leave the procurement workforce every year, though, with fiscal 2006 loss rates ranging from 8 percent among those designated as contracting personnel to 22 percent among procurement clerical and assistance workers, supporting the argument that projections of a "retirement tsunami" may be overly dire.

In a summary, report authors said, "The information will provide a governmentwide baseline of federal contracting workforce competencies and it will help determine areas where training would be most beneficial to augment the levels and distribution of current contracting capabilities."

Acknowledging recent refrains from the Office of Management and Budget and an independent acquisition advisory panel, the authors said new statistics support observations that acquisition workloads have grown larger and more complex, and agencies need to identify crucial skills, recruit and retain employees, and plan for change as the nature of acquisition work continues to evolve.

The number of federal acquisition personnel has increased about 3 percent since fiscal 1999, a growth rate that falls far behind the more than doubling in federal contracting that has taken place during that period. Federal contract dollars totaled $188 billion in 1999 and rose to about $394 billion in fiscal 2006 -- a 110 percent increase -- according to recent OMB figures.

The latest workforce data builds on a long series of similar annual reports, but the acquisition advisory panel last year found that data insufficient to resolve questions about whether more hiring was necessary to bolster the federal procurement workforce, or if increased training and other measures would suffice.

The Federal Acquisition Institute recently completed a more comprehensive study of the civilian acquisition workforce for OMB, and the Defense Department has developed a modeling tool to help analyze its procurement workforce needs. Information collected through those studies could help in answering some of the panel's questions.

Paul Light, a professor at the Robert F. Wagner School of Public Service at New York University who specializes in federal workforce issues, said he doesn't believe there are enough acquisition workers to handle the workload. The result, he said, is more sole-source and large, aggregated contracts.

The relationship between contract volume and contracting personnel also raises questions, Light said. "By my experience, there is no relationship between size of an agency's budget and the size of its acquisition workforce, and that requires some sort of explanation," he said.

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OMB orders agencies to report on competition for contracts

Jenny Mandel — Fri, 01 Jun 2007 00:00:00 -0400

The Office of Management and Budget is shining a light on competition in contracting, with a new directive that agencies review their procedures and report back on how to maximize the use of competitive practices.

"The acquisition workforce has a number of tools to facilitate the efficient and effective use of competition," Office of Federal Procurement Policy Administrator Paul Denett wrote in a memorandum to senior procurement officials. "I am concerned that we are not taking full advantage of these tools, especially in the placement of task and delivery orders under indefinite-delivery vehicles."

Federal competition levels on a percentage basis have remained relatively constant since the early 1990s, with around 60 percent of contract dollars awarded competitively. But total contracting dollars have climbed steadily over the past decade and noncompetitive contract amounts have grown steadily as well, according to OMB data.

"The lack of meaningful competition for orders has taken on increased significance in recent years with the growth of obligations through task and delivery orders," Denett said, referring to the system by which an agency uses expedited procedures to buy under a pre-established contract agreement. Such orders comprised 14 percent of contract dollars in fiscal 1990, but rose to 52 percent of dollars in fiscal 2005, Denett said.

Reminding officials that all federal agencies have someone designated to promote competition, Denett called on them to "reinvigorate the role of the competition advocate."

The memo instructs such advocates to develop new annual reports, the first of which will be submitted to OMB in late December. After reviewing competition levels at the agency and establishing plans and goals to maximize competition, the competition advocate must report on competition trends and recommendations.

The procurement chief also said he would propose a series of changes to the Federal Acquisition Regulation, the main contracting rule book, some of which were recommended in a draft report by an independent acquisition panel last year.

Among Denett's suggestions are that agency competition advocates report annually on contract awards and management of task and delivery orders of more than $1 million; noncompetitive contracts awarded on an "urgent and compelling need" basis be limited to the minimum duration necessary with senior approval needed for those lasting more than one year; sole-source awards be announced on the FedBizOpps portal; competition rules on major multiple award contracts be strengthened to ensure that several companies have the opportunity to bid; and evaluation factors be clearly spelled out in large task and delivery orders so competing proposals can be assessed properly.

Denett also targeted the transparency of data in the Federal Procurement Data System, the government's central contracting storehouse, calling on the General Services Administration to develop a report that would distinguish between minor contract actions, such as a vendor address change, and significant actions, such as a contract modification or new agreement. He said the new report would enable better analysis of contract use and the workload carried by acquisition personnel.

Steven Kelman, who drove the acquisition reforms of the mid-1990s when he served in Denett's role and is now a professor of public management at Harvard University's John F. Kennedy School of Government, agreed that competition on task and delivery orders has been a problem. But he said rule changes that took place a few years ago helped to address that by generally requiring that at least three bids be received for such orders, and pushing agencies to justify why that level of competition was not achieved if they had fewer bids.

"In some sense, the heavy lifting on improving competition for task and delivery contracts has already been accomplished with the statutory and regulatory changes over the past few years," Kelman said. "This is sort of icing on that cake."

Kelman said new reporting requirements imposed on competition advocates would likely amount to more bureaucratic paperwork, but he welcomed several of the other proposed rule changes as a useful way to approach the issue.

Marcia Madsen, who chaired the acquisition advisory panel, expressed satisfaction with the extent to which OMB picked up on the group's recommendations. "Most of the things they could do, they've done," she said. Madsen said additional proposed measures, like formalizing the minimum number of bids required on task and delivery orders, would have to be taken up at the legislative level.

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GSA announces five Networx telecom awardees

Jenny Mandel — Thu, 31 May 2007 00:00:00 -0400

Five companies have been selected to provide up to $20 billion in telecommunications services to federal agencies through the General Services Administration's Networx Enterprise contract.

AT&T, Level 3 Communications, Verizon Business Services, Qwest Government Services and Sprint Solutions were awarded slots on the contract and will have the opportunity to bid for voice, wireless, Internet protocol and satellite service contracts under the program, GSA announced Thursday.

"We at GSA are committed to our customers, and award of the Networx Enterprise contracts today provides them superior telecommunications services from the best American companies at the best prices available in the marketplace," said Lurita Doan, GSA's administrator.

Three of the awardees -- AT&T, Verizon and Qwest -- are also providers on the complementary Networx Universal contract, which offers comprehensive telecom services. The Enterprise contract, in contrast, is a boutique-style award that lets companies offer smaller or more selective service packages at potentially lower prices.

The awardees will offer nine mandatory services and up to 41 optional services, and John Johnson, GSA's assistant commissioner for integrated technology services, said "most if not all" of the 135 federal agencies that currently buy telecom services through GSA likely will become Networx customers. Transition to the new contracts will take about three months as companies must first certify the systems they intend to offer.

Sprint was not included in the Universal contract award announced in March, leaving many government customers to wonder whether their existing provider would be available through GSA's new contract. The announcement that Sprint won a place on the Enterprise contract means that some agencies could avoid a choice between GSA's procurement services and their incumbent telecom provider.

Sprint currently supplies about 30 percent of all government telecom services through its place on FTS2001, the predecessor to Networx, and serves the Defense, Homeland Security, Transportation, Veterans Affairs and Interior departments among other federal customers.

On Wednesday a Defense official told Government Executive that the department was committed to using the Networx contracts. Defense will be the largest federal customer and is a demanding user in terms of the reliability and global scope of services required, making it likely that the agency would rely heavily on the larger Universal contract, of which Sprint is not a part.

The five companies on the Enterprise contract are each guaranteed a minimum of $10 million in revenue over 10 years, and the contract as a whole has a ceiling of $20 billion for that period, GSA officials said. Universal has a much larger $525 million minimum guarantee and can range up to $48 billion. Johnson said GSA does not expect purchasing under either contract to push up against the ceiling.

Agencies will initially pay a 7 percent fee to GSA to buy through Networx, but Johnson said that after the transition period, GSA would propose a new tiered fee structure. Agencies that rely heavily on GSA for services like contract billing would pay the most, while direct-bill, direct-pay agencies will be offered a lower rate.

A tiered system could smooth feathers ruffled by GSA's decision to offer the Treasury Department a steep rate cut in exchange for dropping a competing telecom contract. Under the agreement, Treasury will pay half the service fee and receive less purchasing support -- an offer not extended to other agencies. Johnson said he could not predict the reduced rates that will be offered under the tiered system.

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Lawyers anticipate failures in Indian trust fund accounting plan

Jenny Mandel — Wed, 30 May 2007 00:00:00 -0400

The Interior Department is expected to file a proposal this week detailing how it will review American Indians' assets held in trust by the federal government, but plaintiffs in a long-running lawsuit already say the plan is likely to be flawed.

"Defendants impermissibly exclude from the accounting the vast majority of the beneficiary class and their trust assets," lawyers for lead plaintiff Eloise Cobell and others in the class action lawsuit Cobell v. Kempthorne argued in a brief filed Tuesday.

In the 61-page document, the first of two to be filed on the subject, lawyers argued that the plan will likely wrongly exclude 11 categories of account holders and assets.

Justice Department lawyers are due to submit Interior's accounting plan to U.S. District Judge James Robertson by Thursday. A Justice spokesman said Wednesday that the plan was not yet available. Lawyers for Cobell said their filing was based on an accounting plan proposed by Interior officials in 2003, quoting the defense as saying that the new plan won't contain anything that was not in the earlier proposal.

The court filings are in preparation for a trial-like hearing scheduled to start in October that will examine the adequacy of Interior's accounting for assets held for American Indians since the 1800s. Groups pay Interior to use American Indian lands for oil, gas and mineral extraction, as well as other activities, and Interior then distributes money to trust funds. But the long-standing lawsuit claims the department has mismanaged the accounts.

Interior officials have proposed carving out some accounts as outside the scope of a reckoning the department was ordered to provide under an earlier court ruling, and have said some types of assets also do not require an accounting.

In the new brief, Cobell's lawyers argue that four proposed exclusions that already have been listed are not justified: accounts closed before a 1994 court ruling, transactions that took place before a 1938 law took effect, payments made directly to beneficiaries under Interior-negotiated oil and gas lease agreements, and payments made to deceased beneficiaries, even if they have living heirs.

They also argued against a series of "likely" exclusions that have been proposed in the past, including accounting for noncash assets such as trust land, assets that were unlawfully turned over from minor account-holders to tribes, lease income that was due to land-owners but never paid, and accounts opened since 2001.

"Impermissible exclusions with respect to the scope of defendants' historical accounting plan remain so remarkably broad that an adequate accounting will not be rendered for the plaintiff class," the lawyers wrote in rejecting the expected plan.

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GAO: Navy needs more contracting discipline

Jenny Mandel — Tue, 29 May 2007 00:00:00 -0400

Poor contracting practices and lenient oversight, combined with an unqualified contractor, contributed to ongoing problems with a Navy vessel that continues to have reliability and performance problems 10 years after its scheduled completion date, auditors found in a new report.

Navy officials awarded a contract to Northrop Grumman Corp. in 1994 to design and build a submersible vessel that could secretly drop off and pick up Navy SEALs and equipment during dangerous missions. Navy officials accepted the Advanced SEAL Delivery System, or ASDS, on an as-is basis in 2003, six years after its planned delivery date, despite its not meeting technical requirements. The single ASDS vehicle in operation continues to have reliability and performance problems, according to a Government Accountability Office report, requested by the Senate Armed Services Committee.

In a blunt assessment, GAO reviewers set much of the blame for the problem at the agency's feet.

"Had the original business case for ASDS been properly assessed as an under-resourced, concurrent technology, design and construction effort led by an inexperienced contractor, DoD may have adopted an alternative solution or strategy," the report stated. "Ironically, after having invested about $885 million in nearly 13 years, DoD may still face this choice."

Reviewers criticized the Navy's 2003 decision to accept the underperforming ASDS vehicle, which transferred responsibility for fixing the remaining problems from Northrop Grumman to the service.

But the assessment focused largely on contracting and oversight decisions made since that time.

In the first two years after accepting the vessel, the Navy continued to pay the contractor for repairs, maintenance and upgrades, mostly under labor-hour contracts or agreements based on actual costs plus a prenegotiated fee. The contracts provided little incentive to meet schedule or cost goals, and the contractor exceeded cost estimates on almost half the delivery orders and missed schedule targets on 20 of 26 orders, GAO found.

Navy officials justified those contract structures as reasonable given the high risk associated with implementing new and complicated technologies, but shifted to more incentive-based fee structures over the following two years. GAO said there were early signs of better performance in the later period, though it was too soon to gauge results.

Navy officials also failed to follow best contracting practices by frequently not settling on terms such as cost and scope of work before authorizing the contractor to proceed, GAO found. In some cases, terms were not agreed upon until after the work was complete.

Navy officials told GAO they were taking more time with requirements development and pushing the contractor to be realistic in its cost and schedule estimates, and said all contract terms have been fully defined before award during the last two years.

The Navy is evaluating how much it would cost to finish the existing ASDS and whether it makes sense to do so, and expects to make a program decision in about a year.

In a series of recommendations, GAO said the Navy should establish firm criteria and test critical systems under operating conditions in time for the program decision, and officials should drop ASDS if the criteria are not met. Navy officials only partially agreed, arguing that some planned modifications will not be finished in time.

They agreed with a broader recommendation that the service should make sure the next follow-on contract appropriately balances risk between the government and contractor, and that the Navy should provide good management and oversight.

Auditors warned that the burden for fixing ASDS rests heavily on the Navy. "DoD's inadequate program and contract management in essence made the prime contractor's poor performance acceptable," they said. "Instilling more discipline into the contracting process is a step in the right direction, but its success hinges on DoD's willingness to hold the contractor accountable."

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Defense purchases of services rise sharply

Jenny Mandel — Fri, 25 May 2007 00:00:00 -0400

Rapid growth over the past five years in service contract costs could reflect overpayments by the Defense Department, according to the Government Accountability Office. But the advantages of freeing up uniformed personnel for combat duty and the difficulty of calculating what it would cost to do the work in-house argue against more closely analyzing the issue, auditors concluded.

In a new analysis (GAO-07-631) of Defense operations and maintenance service contracting completed at the request of House appropriators, GAO found that purchasing of services has grown steeply over the last several years.

The operations and maintenance funds that equip soldiers and maintain bases, among other uses, increased 57 percent between fiscal 2000 and fiscal 2005, largely due to operations in Iraq and Afghanistan and disaster response, GAO found. Service contracts over the same period rose an even steeper 73 percent.

In contrast, operations and maintenance spending increased about 1 percent annually over the preceding five-year period, GAO found.

Defense officials attributed the recent increase in part to aging military infrastructure, higher fuel and utility costs and information technology spending. They also cited an increased use of budget work-arounds through which the branches buy services such as training rather than products like new simulators, thus avoiding competition for scarce procurement funds.

The military branches recently have expressed concern about the high price tag of services, with the Army and Air Force both issuing guidance on cutting costs. Officials told GAO of concerns about contract development and oversight, as well as the loss of flexibility that can result from contractors doing work formerly performed by uniformed personnel.

But Defense officials also told GAO that buying services frees up military personnel for combat, and can supply skills that are in short supply within the department. Using contractors also can be easier during the hiring and firing stages, officials said, and can be cost-effective when there is strong competition.

GAO reviewers found that on the whole, there was not enough information available to assess whether service contracting is cost-effective. "Sufficient data are not available to determine whether increased services contracting has caused DoD's costs to be higher than they would have been had the contracted activities been performed by uniformed or DoD civilian personnel," they wrote.

Analyzing data on competitive sourcing showed that outsourcing stemming from a public-private competition generally saved money, but reviewers said the process was not necessarily reflective of the overall universe of service contracting.

Reviewers said that while there might be "some merit" in better analyzing the cost-effectiveness of operations and maintenance service contracts, they did not recommend doing so, given how expensive it would be and the immediate pressures of military operations. "As long as DoD uses competitions in its contract solicitations for new and expanded requirements and provides adequate contract oversight, cost efficiencies could be achieved through normal market forces," they wrote.

Last year, a congressionally chartered panel on services acquisition found that in fiscal 2005, 20 percent of government service contracts were issued without competition. The panel also found that a reporting problem with Defense contracts may have overstated the number that used full and open competition.

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NASA official grilled on destruction of meeting videos

Jenny Mandel — Thu, 24 May 2007 00:00:00 -0400

A NASA lawyer may have violated federal law in destroying video recordings of an April meeting between the agency's chief and inspector general staff, a House lawmaker said Thursday.

NASA General Counsel Michael Wholley told the House Science and Technology Subcommittee on Investigations and Oversight that he had broken and destroyed DVD recordings of an all-hands meeting on April 10, during which NASA Administrator Michael Griffin addressed IG staff.

The meeting was convened so that Griffin could speak to IG employees about the results of a formal investigation into the actions of their boss, Inspector General Robert Cobb. The President's Council on Integrity and Efficiency, a council of inspectors general that looks into allegations against IGs, recently had concluded an investigation that found Cobb had created an abusive work environment and the appearance of a lack of independence from agency leadership.

During the meeting, which was videocast to IG staff around the country, Griffin reportedly expressed support for Cobb, noting that the investigation did not find an actual lack of independence, and said he supported a strong and effective IG office.

Wholley, the general counsel, told lawmakers that he later learned from agency Chief of Staff Paul Morrell that recordings had been made of the meeting, counter to a prior instruction that no taping take place. After receiving what he believed were the only copies of the offending DVD from Morrell, Wholley said, "I personally made the decision to destroy them, and I did so by breaking them into pieces and throwing them in the trash."

Wholley said before destroying the tapes, he consulted the Federal Records Act and concluded that they did not constitute official records, but that if copies were retained, they would become official records and subject to disclosure under the Freedom of Information Act.

Wholley testified that he felt the meeting could hurt the administrator. In an e-mail from Wholley to Morrell sent prior to the videocast meeting and distributed at the hearing by committee staff, Wholley wrote that he was concerned that such a meeting could only make Griffin look bad.

"I see no 'upside' for Mike [Griffin] in the proposed [course of action], and I do see a downside," Wholley wrote. He warned that if Griffin spoke critically of the IG, it would lend credibility to the complaints, while if he praised the IG, it would shift the controversy to himself.

Rep. James Sensenbrenner, R-Wis. and ranking member of the subcommittee, questioned Wholley closely on the decision to destroy the DVDs. Sensenbrenner said that as a record dealing with the function and operation of a federal agency, made at government expense, the tapes were public records and were thus protected by law.

During the hearing, an assistant IG testified that Griffin's statements during the meeting had stirred additional concern among her staff. She reported several staff concerns, including a perception that the administrator would only take action on findings that would save $1 billion or more -- difficult at an agency whose total budget is about $16 billion per year.

Wholley told the committee that employee accounts of the meeting "range from the patently false to the ridiculous." But Rep. Brad Miller, D-N.C., chairman of the committee, stressed that Wholley's destruction of the video evidence generally would be considered damning in court.

Speaking after the hearing, Miller said he thought the destruction of the DVDs was "at best, extremely poor judgment." He said Sensenbrenner had proposed submitting a joint letter to the attorney general requesting a criminal investigation into the destruction of government property.

Miller said there were "clear questions" on the propriety of destroying the videos when Wholley was aware of the oversight committee's interest. The committee in March considered issuing subpoenas to obtain a copy of the investigative report on Cobb, but the IG council ultimately turned it over to lawmakers voluntarily.

Despite his misgivings about the DVD incident, Miller expressed support for Administrator Griffin, calling him "a breath of fresh air" for NASA in comparison to his predecessor, Sean O'Keefe. "Sean O'Keefe had all the interest in aeronautics and space that [former Federal Emergency Management Agency director] Michael Brown showed in emergency management," Miller said.

He noted that there are additional outstanding complaints against Cobb. Those complaints -- allegations that the IG retaliated against whistleblowers -- were referred to the Office of Special Counsel for follow-up, Miller said.

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Recording raises questions about tax collection calls

Jenny Mandel — Wed, 23 May 2007 00:00:00 -0400

House lawmakers heard first-hand on Wednesday the frustration of a taxpayer whose debt was referred to a private collection agency, but an Internal Revenue Service official said expansion of the controversial outsourcing program would proceed on schedule.

House Ways and Means Committee member Rep. John Lewis, D-Ga., played an audio recording of an unidentified taxpayer whose delinquent tax debt had been turned over to The CBE Group Inc. of Waterloo, Iowa, one of two companies working under an IRS pilot program to give relatively simple tax debts to private sector firms for collection.

In a series of calls, three debt collectors mentioned just a first name and exhorted the taxpayer to call them back at a certain number. When he returned the call, the man learned that it related to a "personal business matter" and was asked to provide his Social Security number and mailing address before the collector would further identify what the call was about -- a demand that he refused, citing security concerns.

When the man asked that the calls cease, a collector said, "I'm not sure what we can necessarily do to stop that." The call ended in a standoff, with the taxpayer saying he would not provide any personal information until he was informed of the purpose of the call, and the collector saying she could not explain until his identity had been verified.

Thomas Penaluna, CBE Group's president and chief executive officer, testified that the program operates under strict privacy restrictions that limit the disclosure of tax information to anyone other than the taxpayer, so collectors are limited in what they can say until a taxpayer's identity is confirmed.

But asked whether he would have returned the brief initial calls left by strangers, Penaluna said "no." Several lawmakers and witnesses also said they would not provide their Social Security number to a stranger over the phone.

Led by Rep. Chuck Rangel, D-N.Y., chairman of the committee, several lawmakers called for the program to be terminated, while others defended it as a way of recovering debts that would otherwise go uncollected.

IRS Acting Commissioner Kevin Brown confirmed that the types of cases handled by the private firms are low on the agency's list of priorities, and said none of the delinquent debts would be collected without the commission-based pilot program.

Asked by Rangel to place a moratorium on about 10 new contracts scheduled to be signed by the end of the year, Brown declined. He said without the new contracts, the program would lapse when the two existing ones end in March 2008.

Brown joined CBE's Penaluna in calling for adjustments to the program, including changing the law to allow collection companies working for IRS to mention the agency in their calls.

Colleen Kelley, president of the National Treasury Employees Union and a vocal critic of the program, said private debt collectors have no interest in individuals' long-term tax compliance, making it more likely that they will risk alienating someone to secure a payment. She said IRS collectors' training and more extensive access to files allows counseling of delinquent taxpayers.

After the hearing, Dan Drummond, a public affairs representative for the Tax Fairness Coalition, an association of debt collection companies, took issue with the unidentified taxpayer's description of the calls he had received as "harassing."

He said the collector's tone throughout the call was "pleasant as pie."

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SBA study shows perils of analyzing small business contracts

Jenny Mandel — Tue, 22 May 2007 00:00:00 -0400

Federal small business contracting is never as simple as it seems. That was the lesson the Small Business Administration's Office of Advocacy learned with the publication of a new report on how small firms fare in outsourcing contests.

On Friday, SBA released a new analysis of small business winnings in competitive sourcing, the administration's initiative to boost the rate at which companies compete to take on government work.

Working with two different data sources -- civilian agency information in the Federal Procurement Data System-Next Generation, or FPDS-NG, and Defense records in the Commercial Activities Management Information System, or CAMIS -- the report assessed the rate at which small businesses prevailed in winning contracts stemming from outsourcing under the Office of Management and Budget's Circular A-76 rules.

First reviewers had to insert the caveat that FPDS-NG data from before fiscal 2004 could not be relied upon. "The new, comprehensive FPDS-NG reporting system renders data collected under the old system incomplete and unreliable," the authors warned.

"It is meaningless to compare absolute levels of contract spending in FY 2003 and earlier years to spending in FY 2004 and FY 2005," the authors said, citing a fiscal 2004 change to the dollar value threshold for reporting A-76 contracts. "The analysis of trends in various market shares over time remains relevant, though, because selected and overall data have changed by comparable percentages," they said.

Experts inside and outside government say that even the newer FPDS-NG system is flawed, as contracting officers have little incentive to record information correctly and, in some cases, data entry fields make it difficult or impossible to do so. In September, OMB Deputy Director for Management Clay Johnson promised that a new computer system for viewing federal contracts going live in 2008 would reflect accurate data.

For the SBA Office of Advocacy study, number-crunchers looked at what data there was for civilian agencies in FPDS-NG for the period from fiscal 2001 through part of fiscal 2006, and concluded that about two-thirds of A-76 contracts won by the private sector had been awarded to small firms, while those awards represented about one in five contract dollars.

For Defense, the CAMIS system reflected a slightly different study period that started in fiscal 2002, but showed a similar ratio, with small firms winning just less than two-thirds of A-76 contracts to take home nearly one third of their total dollar value.

The authors drew few conclusions from these statistics, but in a limited analysis of work converted directly to private performance without a lengthy competition process, they said similar figures suggest "that DoD relies on small firms for small outsourcing jobs and large firms for large jobs."

But the results get murky when you look at the total number of A-76 contracts. SBA's report indicated there were 3,735 civilian A-76 contracts awarded since 2001. But an early May OMB report on the government's A-76 activities said agencies have completed only 1,243 competitions between fiscal 2003 and fiscal 2006. Moreover, when measured by number of jobs (not contracts), OMB said agencies' in-house teams swept up 83 percent of that work, leaving just 17 percent to companies of all sizes.

Those figures compare apples to grapes and tomatoes, mixing contracts and competitions, jobs and contract awards, but the numbers do not seem to line up.

Eagle Eye Publishing, which wrote the report for SBA along with Bethesda, Md.-based Jack Faucett Associates Inc., clarified that those 3,735 contracts actually represent just 941 unique contract agreements. Contracts that extend over multiple years were counted multiple times in the study, said Eagle Eye president Paul Murphy (Eagle Eye also processes the data for Government Executive's annual Top 200 Contractors special issue).

On the Defense side, the contract figures represent 129 "initiatives," based on the best unique identifier that reviewers could pick out. But the initiative data included no deeper view of how long contracts lasted, among other missing fields.

Radwan Saade, an SBA contracting official who oversaw production of the report, said it would be impossible to compare the OMB and SBA figures without knowing more about how OMB's data was collected.

An OMB spokeswoman said factors contributing to different results could include how the studies account for private firms teaming with a government service provider, and the large number of contracts signed by NASA under a special waiver that resulted in multiple awards per competition.

What is clear is the low probability that any of the figures show the full picture.

By the time the report was published, FPDS-NG reflected almost $1.3 billion in A-76 contracts in fiscal 2006, according to Eagle Eye. A meager $8.98 million of that represented the first trickle into the system of Defense A-76 contracts. And in the most recent CAMIS report, the Defense A-76 spending for that year was listed as just $1.4 million.

It all depends on where you look.

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Oversight of Iraq reconstruction winding down

Jenny Mandel — Tue, 22 May 2007 00:00:00 -0400

As Congress and the White House wrestle over a firm timeline for withdrawal from the war in Iraq, plans are under way to wrap up reconstruction funding and oversight.

Stuart Bowen, the Special Inspector General for Iraq Reconstruction, testified Tuesday before the House Foreign Affairs Committee that "the phase wherein the U.S. bears the burden of financing Iraq reconstruction has passed," and outlined the investigations, audits and reports his office will issue before closing its doors at the end of 2008.

The plans include issuing more "sustainment" reports that go back to completed projects to assess how the new managers are faring. At several of the sites visited for a series of such reports in April, equipment was not operating due to breakdowns or lack of training among Iraqi workers. New power and sewage systems had fallen into disrepair.

Bowen said over the coming months he expects to see significant progress on cases of fraud and other wrongdoing that his office has turned over to Justice Department prosecutors. The office also will publish the results of investigations targeting Blackwater security contracts, Parsons Corp. and DynCorp International, as well as contract management by the Air Force Center for Environmental Excellence and the Army Corps of Engineers.

An upcoming audit will examine Iraqi anti-corruption institutions, which Bowen said are hobbled by laws that exempt ministers, any employee designated by a minister, and former ministers from prosecution.

Bowen attributed many of the problems encountered in the Iraq reconstruction programs to the difficulty of rebuilding in a war zone, and said corruption among Iraqi institutions represents "a second insurgency" in terms of the challenge it presents.

Achievements on the ground have fallen far short of what was initially planned. Only eight of 150 planned primary health centers have opened, and the country pumps 2.5 million barrels of oil per day, short of the 3 million barrels promised four years ago, according to opening remarks by committee chairman Rep. Tom Lantos, D-Calif.

Committee lawmakers lavished praise on Bowen's oversight work in Iraq, telling his mother, who sat behind the IG in the audience, that she should be proud of him.

But Lantos put Bowen on the hot seat at one point, pushing the inspector general to list the countries that had fallen short on the delivery of reconstruction funds pledged during an October 2004 meeting in Madrid.

When Bowen resisted the chairman's instruction to recite aloud the names of the offending donors, Lantos forced the issue. "No, I will not take your answer later, I will take it now," the chairman said.

Bowen informed the panel that the European Commission delivered less than 10 percent of the $4 billion it pledged, while Saudi Arabia and Kuwait turned over similar fractions of their $500 million pledges and United Arab Emirates failed to follow through on a pledge of $250 million.

Bowen said his access to data on delivered funds was sharply reduced last fall when the Iraqi government took over collection, so the figures he quoted were not fully reliable.

Lantos called the funding shortfall a disgrace.

But separately, the chairman expressed full support for Bowen regarding an ongoing investigation into allegations that the IG wasted public funds on a book summing up the reconstruction and falsified time sheets. Lantos said that without knowing any details of the complaints, he had full confidence in the IG.

Bowen said the complaint was "virtually over" and that he is not concerned about the matter.

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McCain pledges to reorganize federal workforce

Jenny Mandel — Mon, 21 May 2007 00:00:00 -0400

Republican presidential contender John McCain outlined a comprehensive platform for government management reforms Monday, describing steps he would take to boost federal pay and speed firings, tie program funding to yearly evaluations and toughen acquisition rules.

"I am a conservative, and I believe it is a healthy thing for Americans to be skeptical about the purposes and practices of public officials, and refrain from expecting too much from government," the Arizona senator was to say in an Oklahoma City policy address, according to an advance copy of the speech.

"We must streamline our workforce. . . . promote excellence at every level based on merit and accountability, and not let good workers be crippled by the fine print of the latest union contract," McCain said in an address that at times expressed a poor view of public servants.

Citing projections that 40 percent of the federal workforce is slated to retire in the next 10 years, McCain said, "This is an opportunity to reorganize the entire federal workforce. We can instill in the next generation of public servants higher aspirations and a greater sense of purpose. I'll devote the necessary resources to it. We can use this opportunity to make sure that government pay scales allow us to attract the finest public servants, equip them with the newest technologies, target replacements judiciously, and change government to make it smaller, less expensive, better skilled, and more dedicated to the national interest."

The candidate said a "new bargain" with federal employees would include more speedy firings, as seen in the private sector. He described the civil service as a "no-accountability zone, where employment is treated as an entitlement, good performance as an option and accountability as someone else's problem."

On federal programs, McCain promised to directly tie funding decisions to annual evaluations. The Bush administration has taken a step in that direction with its Program Assessment Rating Tool, which has been used to evaluate almost all federal programs over the past five years. Faced with pushback from lawmakers who argue budgeting is their prerogative, administration officials have insisted the PART ratings are not used to dictate funding but to provide helpful information.

McCain said as president he would press that link further. "We'll find some good performers, and I'll be proud to recognize them," he said. "But when we do not, performance will determine whether they are funded the next year. Government programs will be judged for the success they've had in meeting a need that people can't be expected to meet for themselves."

McCain also singled out acquisition reform, delving into details of contracting that other presidential hopefuls like Hillary Clinton and Rudy Giuliani have steered clear of so far.

Citing "more than 100 studies [that] have identified the same problems over and over again for many years," McCain embraced a slate of measures. He said he would expand the use of fixed price contracts, but make sure the government uses realistic cost estimates. He promised to limit sole-source awards and make sure acquisition programs set clear requirements from the outset.

While contractors cringe at talk of fixed prices, McCain said he would welcome private sector ideas into the folds of government. Saying that government responded more slowly to Hurricane Katrina than did Wal-Mart, the candidate said new emergency operations centers should include business operations units to coordinate with the private sector. New federal liability protections should protect companies working with government to respond to disasters, he said.

With a nod to the number of inspectors general currently pulled into investigations of alleged bad behavior, the senator said that in a McCain administration, every inspector general would have direct access to the head of the department, who in turn would be held responsible for integrity.

"I know these reforms won't be easy," McCain concluded. "An entire bureaucracy has grown comfortable in its cocoon of rules and regulations and is not about to change its habits without a fight."

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Lawyers prepare for October hearing on Indian trust fund accounts

Jenny Mandel — Thu, 17 May 2007 00:00:00 -0400

Litigants in a long-running battle over management of American Indians' trust funds are laying the groundwork for an October hearing into the Interior Department's accounting for the funds.

Lawyers in the 11-year old case, Cobell v. Kempthorne, met with U.S. District Court Judge James Robertson this week to begin working out the rules that will govern the evidentiary hearing.

Robertson scheduled the hearing last month to work through the wide gap that divides the government and plaintiffs in a class-action lawsuit on whether Interior's proposed accounting plan meets the government's obligations to individuals with agency-managed trust funds dating back to 1887.

"More than seven years (and 28 quarterly status reports) after [a court decision that mandated the accounting], it is both prudent and well within the supervisory powers of this court to review the accounting project in detail, and to do so in open court, where the government may present, and plaintiffs may test or challenge, the methodology and results of the accounting project," Robertson said in the April order.

He said the October hearing, which would be like a trial, would set out to answer whether the government had fixed the accounting problems identified in the 1999 decision, whether historical statements of accounts being prepared by Interior meet their legal obligations and whether the government has unreasonably delayed the accounting process.

Bill McAllister, a spokesman for lead plaintiff Eloise Cobell, said the new hearing was a major milestone in the case that shows Robertson's intention to resolve the issues after years of delay. "We've been saying for some time [that] where the two parties parted company is the question of what type of accounting can be done," he said.

Cobell's side has argued that the government does not have the records needed to accurately reconcile the roughly 500,000 individual trust funds in dispute. McAllister said the government should not rely on existing records, as it has proposed to do, but should recreate transaction records for oil and gas lease payments.

McAllister said some of the questions he would like to see the court address are how far back the review should go, which trust beneficiaries have the right to an accounting and how many records must be validated.

A Justice Department spokesman said he could not comment on lawyers' strategy in presenting Interior's side of the case, but officials have argued that ongoing accounting work has unearthed only small discrepancies in the trust fund records, some of which benefited the account holder.

Cobell soundly rejected an Interior Department proposal, floated earlier this year, to settle all cases from individuals as well as a series of separate cases brought by American Indian tribes, for $7 billion. The plaintiffs said the amount offered by the government was too low, while a mediator has said that $7 billion to $9 billion could settle the Cobell case alone.

McAllister said reaching a settlement is complicated by the high price tag. Unless a payment is dictated by the court, it would most likely require an appropriation from Congress. But political will to end the case may have ebbed when Sen. John McCain, R-Ariz., who headed the Indian Affairs Committee last year, was unable to pass a bill before the session ended, he said.

"At the moment, there doesn't seem to be any movement on Congress' part," McAllister said.

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