Subcommittee finds GSA public relations contract wasteful

Sen. Claire McCaskill says the contract is not "in the best interests of taxpayers." Sen. Claire McCaskill says the contract is not "in the best interests of taxpayers." Tim Sloan/Newscom
A nearly quarter-million-dollar public relations contract was badly mismanaged by the General Services Administration, which allowed the vendor to write the statement of work, failed to clearly define specific deliverables and did not seek competitive bids, according to a Senate subcommittee investigation.

In the wake of bruising news reports in late 2009 and early 2010 that the 310-acre Bannister Federal Complex in Kansas City, Mo., was contaminated with toxic substances, GSA signed a nearly $100,000 contract with Jane Mobley Associates Inc., a small, women-owned public relations firm. The one-month contract was later extended for an additional two months at a cost of $134,000.

But Senate lawmakers on Tuesday questioned both the necessity and management of the crisis communications contract. At a hearing of the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, Chairwoman Claire McCaskill, D-Mo., argued the contract was poorly administered and failed to include sufficient oversight from agency officials.

"This contract does not appear to be in the best interests of taxpayers," said McCaskill, who as Missouri's junior senator has closely followed the issues at Bannister, where more than 2,000 federal employees and 2,300 contractors work.

Senior GSA leaders initially insisted the contract was properly conducted. But as the hearing wore on and a number of damaging findings -- including the release of private e-mails -- were taken up by the subcommittee, officials began singing another tune.

"In a sense of legal culpability, we did nothing wrong or illegal," said Robert Peck, commissioner of GSA's Public Buildings Service. "But in hindsight, I admit that mistakes were made. This is an episode for which we have learned a couple of lessons."

From the 1940s through the 1960s, portions of the Bannister complex were used as a dumping ground for waste from the Kansas City Plant, resulting in extensive soil and groundwater contamination. During the past two decades, the government has addressed the environmental and health hazards caused by the contamination, and the site now has been deemed safe by several federal agencies.

But beginning in November 2009, a series of local news reports raised questions about environmental conditions at Bannister, including interviews with employees who were experiencing serious health problems. A significant increase in inquiries from the public, local officials and the press soon followed. A protest was staged outside Bannister's child care center.

"These new events, together with a surge in media attention stoked by rumors and misconceptions, created an unpredictable and unprecedented 'pressure cooker' environment that threatened our ability to maintain people's confidence in the Bannister Federal Complex as a safe place to work, to visit, and to entrust their children for the day," said Mary Ruwwe, regional commissioner of the Heartland Region at the Public Buildings Service.

Ruwwe said the agency lacked the in-house technical expertise to respond to the requests. At the suggestion of the Environmental Protection Agency, GSA awarded a contract to Jane Mobley Associates, a vendor listed on the GSA's Multiple Awards Schedule.

Subcommittee-obtained evidence showed GSA officials spent only one day researching potential contractors before selecting Jane Mobley, though the agency did compare the prices of three local firms. GSA justified the lack of competition by citing the "unusual and compelling urgency" of its requirement.

"GSA believed that these circumstances existed because of employee and tenant concerns that conditions impaired their ability to work," said Administrator Martha Johnson.

Under the Federal Acquisition Regulation, "unusual and compelling urgency" refers to circumstances in which the government would be "seriously injured" if it is not allowed to limit competition. McCaskill said the PR contract did not meet that threshold.

The contract's statement of work was apparently written by the contractor, rather than by the contracting officer, as is typical in federal procurement, according to an audit report by GSA's inspector general. GSA officials said they were under the impression that the statement of work was written by EPA.

"The contract was poorly conceived and administered," said IG Brian Miller at the hearing. "GSA awarded JMA a task order without substantiating the asserted 'unusual and compelling need' to justify restricting competition. Furthermore, the award lacked measurable deliverables and a well-defined scope of work. This created a situation in which the government has no assurance that it paid a fair price for the services it received."

Johnson conceded GSA "would not have acted the way it did" if it knew Jane Mobley wrote the statement of work.

The IG also found the contractor did not provide any special expertise in digesting and translating technical data. "The JMA work product did contain information readily available on the Internet, and, in some cases, inaccurate data," Miller said.

The subcommittee also released embarrassing e-mails that appear to show the contractor rushing through a contract extension while Jason Klumb, GSA's then-newly appointed regional administrator, was travelling in South Korea. Klumb had previously expressed concerns to Ruwwe that the cost of the PR contract was too high and that it should not be extended. Ruwwe dismissed the concerns, and the office drew up a two-month contract extension, e-mails show.

On March 8 2010, GSA sent the contract extension to Jane Mobley for signature. Mobley quickly forwarded the extension document to a colleague and urged her to get the contract signed quickly, writing: "Pls get Jenny and execute asap:-) before it's wake-up time in Korea." Mobley did not respond to a request for comment on the e-mail.

In an e-mail, Jane Mobley said she did not watch the hearing and was unable to immediately comment on the allegations.

McCaskill said someone at GSA should be held accountable for the contract mistakes. "I never want to a PR contract issued again in the way this was issued," she said.

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