Broadcasting Board Outsources Controversial Newsroom Contracting

On the final day of fiscal 2014, the Broadcasting Board of Governors struck a blow for easing long-simmering tensions over its administration of contracts; it farmed the process out.

In a staffwide memo from the agency’s International Broadcasting Bureau, executives stressed a need to “change our business culture to better reflect the importance” of contractors, who number about 630 and cost some $30 million annually. Following a request for proposals in June, the BBG has now selected two firms, Technologist Corp. and the NetCom group, to “directly employ or subcontract with the contractors fulfilling technical and broadcast services for the BBG,” primarily at the Voice of America.

Managers stated that “this is not an effort to replace individual contractors. We expect that both NetCom and Technologist will be employing many of the BBG’s current contractors.”

The move follows complaints last winter that the agency had violated Internal Revenue Service rules on classification of workers, many of them foreign-born reporters and producers. And a June inspector general’s report cited the BBG for multiple violations of the Anti-Deficiency Act and the Federal Acquisition Regulation by allowing hundreds of personal services contracts for nonemployees and failing to properly train contracting officers to monitor compliance.

In July, the American Federation of Government Employees Local 1812 blasted the BBG saying the agency’s secretive 12-year-old plan to use more contractors instead of full-time employees, done in the transition from radio to video through a Personal Services Contracting Pilot Program without Civil Service rules, was a “back-door” way of “defederalizing” the BBG.

Asked recently to comment on the new outsourcing plan, an AFGE Local 1812 spokesman said the BBG “has been forced into changing its policy regarding individual contractors as a direct result of investigations by the Internal Revenue Service and the Office of the Inspector General, both of which uncovered improper contracting practices.

The union views the past use of individual contractors, as well as moving a large number of contractors under the umbrella of the two selected firms, as continuing an improper conversion of federal employee functions to the private sector: “Individual contractors have been, and will be, performing much the same services as federal employees at the agency; the contractors’ work has been supervised in parallel fashion to federal employees.”

The spokesman acknowledged that AFGE does not represent any current BBG contractors, despite having been approached by some for help. Contractors also appealed to BBG board member Victor Ashe, who has since retired. “The best resolution to this improper use of contractors at the BBG and the end of this scandal,” the spokesman added, “would be for the agency to admit wrongdoing and do what should have been done in the first place, hire the employee-paralleling contractors into the Federal Civil Service.”

Equally negative is Ted Lipien, the bombastic editor of the mostly anonymous BBGWatch.com blog, who told Government Executive, “Outsourcing the problem by the same VOA and BBG bureaucracy, which has grown by nearly 40 percent in the last seven years, while cutting broadcasts and news output, raises the question what will the bureaucrats who had created the problem do. There is a tremendous disconnect between the management on one hand and program producers and audiences on the other. The management no longer knows who is producing the news and what is being produced . . . The effects of hiring hundreds of poorly trained and poorly supervised contractors in violation of the Anti-Deficiency Act can also be seen daily in embarrassing mistakes and missed news stories on the Voice of America website. VOA is in a management meltdown and further outsourcing of critical tasks will only make it worse.”

Lipien says the new arrangement should be blocked by incoming BBG Chief Executive Officer Andy Lack, and the agency eventually reorganized after what he hopes will be passage by the Senate of the House-passed H.R. 4490, an international broadcasting reform bill to reorganize BBG championed by House Foreign Affairs Committee leaders Ed Royce, R-Calif., and Eliot Engel, D-N.Y.

In BBG’s defense, spokeswoman Lynne Weil told Government Executive that the “new effort aligns with recommendations from the inspector general,” but added that “efforts to address contracting inefficiencies began well before the OIG audit. Agency leadership began evaluating a new contracting strategy in 2012 after a number of contractors identified ways that the BBG can be a better business partner. After almost two years of analysis of contracting processes and practices, agency leadership determined that the best way to streamline the system is to contract with outside firms to provide contractor support rather than contract individually.”

Weil noted that other agencies use the same contracting model, along with other units within BBG, such as its Office of Digital and Design Innovation, parts of VOA Operations, and International Broadcasting Bureau’s Technology, Services and Innovation office.

Addressing fears by some that contractors’ pay will be cut, Weil said, “We are making this change as part of a larger effort to address administrative inefficiencies and improve our business relationships with our contractors, not to reduce costs for contracting.” In a Frequently Asked Questions feature on its website, the BBG noted that whether contractors get benefits will depend on the two outside firms to which journalist and producers seeking BBG work must apply competitively. “We anticipate that the outside firms will likely absorb a large number of BBG’s current contractors,” BBG said. “However, depending on the agency’s budget and contractor pricing, we may need to adjust the size of our contract workforce.”

Weil said freelance journalists be paid sufficiently, “and furthermore, we expect contractor rates will be more standardized. Until now, contractor rates have been negotiated on an individual basis between the contractor and the agency. Under the new contracting model, compensation will be negotiated between the individual and the outside firms holding the contracts. The new system does not apply to domestic or overseas stringers or contractors who provide assignment-based work off-site, so these freelancers’ arrangements are unaffected.” 

One employee who attended last week’s BBG meeting on the new contractors, speaking to Government Executive on condition of anonymity, said that “by finding the two cheapest companies one could imagine, BBG at least in theory has brought down the firms’ estimated markup, which brings costs down. That shifts the disaster from a bunch of prospective layoffs to more slow pain” at BBG, which “kicks the can down the road.”

The initial version of this story misspelled BBG spokeswoman Lynne Weil's name. The story has been corrected.

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