The test of whether a federal performance bonus is merited is “whether I can explain it at a Senate hearing,” acting General Services Administration chief Dan Tangherlini told a Senate panel Wednesday. Bonuses should be given only for “special, exemplary, extremely justifiable acts,” he added, and “the quality of our work should not be dependent on a bonus award but on commitment” to mission.
Tangherlini appeared with GSA Inspector General Brian Miller before the Senate Homeland Security and Governmental Affairs Committee to respond to senators’ reviews of lengthy committee questionnaires the agency had completed as part of the ongoing fallout from the April 2012 scandal over lavish spending on entertainment at a GSA training conference in Las Vegas.
The acting administrator said his top-to-bottom review of the troubled agency has produced a restructuring of authority and new cost-saving policies on conferences and purchase cards, as well as disciplinary measures on individuals, some 11 of whom were fired after the overspending became public.
“Unfortunately, the Las Vegas event was not an isolated instance of bad judgment,” Chairman Joe Lieberman, I-Conn., said as he reviewed the history of the “obscure federal agency” established after a 1947 commission saw a need for GSA to “take care of housekeeping matters so other agencies could focus on mission.” He said the “culture of abuse and irresponsibility” went beyond GSA’s Public Buildings Service’s Western Region to include the misuse of purchasing cards, a badly run awards program and a conference in Northern Virginia where thousands of dollars were spent so that attendees could “beat on drums.”
Ranking member Susan Collins, R-Maine, read from a Fortune magazine article that said GSA employs many good people but “seems to be the most durable mess in Washington” -- the article was written in 1955. GSA continues to have a “cultural problem,” Collins said, mentioning a 2012 leadership conference in Napa Valley, Calif., that cost $40,000, a relocation allowance of $300,000 for one employee who left after one year, and trips to Hawaii by five or six GSA employees for a ribbon-cutting ceremony that lasted one hour.
The returned Senate questionnaires, Collins said, showed that GSA’s 11 regional administrators “were not able to answer our basic questions on budgets and spending in their own regions -- there is no system to track expenditures.” She added the configuration "makes no sense and excludes accountability.”
After being praised for canceling 47 GSA conferences, Tangherlini said the Las Vegas event was “a complete waste of taxpayer money” and reflected a culture that grew up over “several years and multiple administrations, and is particularly at odds with this administration and GSA’s mission.”
GSA already has saved $11 million on reduced conferences and has set up a mandatory online training on conference attendance “so that employees understand what is acceptable,” he said. Asked by Sen. Ron Johnson, R-Wis., for the purpose of conferences, Tangherlini replied, “the primary focus is training, connections to vendors -- particularly small business -- and on bringing people together to exchange ideas and build connections. There’s nothing wrong with them in principle, but there are other ways to do it,” he said. It should “look like a government conference -- austere, focused, mission-oriented.”
GSA’s review, the administrator said, has included solicitation of more than 500 efficiency ideas from employees, which has produced $6 million in potential savings. Meetings have been held with business leaders in real estate and procurement as well as dozens of other federal agencies.
“One of the key findings of our top-to-bottom review was that consolidation of the chief information officer functions provides an opportunity to improve the performance and cost-effectiveness of GSA’s IT portfolio,” Tangherlini said, announcing a plan to centralize that function after having already done so for financial operations. GSA also will notify Congress, he added, that it plans to consolidate hiring responsibility under a chief people officer.
Tangherlini has imposed a “targeted hiring freeze,” to make sure that new hires mesh with the coming new structure. He has reduced bonuses across the agency by 85 percent. And on Sept. 4, he appointed new leadership of the Public Buildings Service, bringing Dorothy Robyn over from her post running the Pentagon’s Defense Base Closure and Realignment Office.
He is planning a reduced fee structure for the GSA multiple award contract schedules to save agencies money, and he promised the panel that he would review the Federal Acquisition Service’s control of a revolving fund currently with reserves of $600 million. Tangherlini said GSA has reduced the number of agency purchasing cards by 15 percent, and, working retroactively with the IG, has submitted bills to a number of employees guilty of wrongful spending, withheld some severance pay and even collected a refund from a contractor.
He would like to institute a 360-degree performance review process for all GSA leaders.
Miller told the panel he was “encouraged” by Tangherlini’s steps, but mentioned that the IG’s office continues to investigate GSA abuses and purchasing cards, including a review of “high-risk conferences” involving 25 or more people, or more than $10,000. He said his staff has recovered $1.9 million since 2009 in fines, forfeitures, penalties, restitutions and seizures.
Collins said she was still concerned that GSA employees had charged large amounts to purchasing cards -- citing the Northern Virginia conference -- or billed the government for per diem meals while at conferences where meals were provided. She questioned why 40 percent of GSA employees make more than $100,000, while 14 make more than $200,000, with one at $279,352. She said some employees have booked “extreme and uncontrolled overtime.”
It seems suspicious, Collins said, during a federal pay freeze and a bad economy, that 50 people shared $35,000 of bonus money -- perhaps a way of adding multiple bonuses up to reach the cap of $10,000. One person received a $79,000 bonus, she said. Anything above $10,000, Collins said, is supposed to be authorized by the Office of Personnel Management. OPM told her it received no such inquiries from GSA. “It’s not as if systems are not in place to check the excessive awards,” Collins said. “It looks like GSA ignored those checks.”
Tangherlini agreed such bonuses were “not in spirit of intentions of OPM rules” and said this reflects the lack of a sound accounting system for GSA’s 15 categories of awards. He noted members of the Senior Executive Service have their own bonus program.
The power of the Senior Executive Service, said Sen. Claire McCaskill, D-Mo, is a big reason for the “calcified mid-management at GSA.” She welcomed Tangherlini’s changes, but called them “an earthquake for the SES. She said she was glad the Las Vegas scandal came along to “topple the entire structure,” describing how GSA’s regional commissioners, during the transition between administrations, had overshadowed the politically appointed regional administrators, who are Congress’ “eyes and ears” for oversight.
That prompted Tangherlini to say any regional administrator who doesn’t feel empowered should contact him directly.
“People understand that GSA is now under the klieg lights,” said Lieberman, “so this is the moment to put in place things to stop a repetition before memory of the Las Vegas conference is gone.”