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Report to Congressional Requesters: 

November 2005: 

U.S. Office of Special Counsel: 

Selected Contracting and Human Capital Issues: 

GAO-06-16: 

GAO Highlights: 

Highlights of GAO-06-16, a report to congressional requesters: 

Why GAO Did This Study: 

In January 2005, the U. S. Office of Special Counsel (OSC) implemented 
a plan, in part, to address a backlog of pending cases. This report 
discusses actions related to the development of this plan, including 
whether required practices and procedures were followed in contracting 
for the services of a management consulting company and in hiring an 
intermittent employee as a consultant. Also, the report identifies 
avenues of redress available to OSC employees for filing prohibited 
personnel practice allegations against OSC, and other redress options 
that could be made available. 

What GAO Found: 

At OSC’s request, the Administrative Resource Center (ARC), an office 
within the U. S. Department of the Treasury’s Bureau of the Public Debt 
which provides OSC with contracting support for a fee, issued a 
$140,000 sole-source task order for an organizational assessment to a 
consulting firm, Military Professional Resources, Inc. (MPRI). In doing 
so, several required steps were not taken:

* competition was not sought among Schedule vendors and there was no 
convincing demonstration of why a sole-source order was necessary. 
* the determination of the reasonableness of MPRI’s price was not 
documented, and 
* OSC officials performed duties normally done by contracting officer’s 
representatives without authorization or training and, further, 
performed other duties that should have been reserved for the 
contracting officer. 

ARC officials told us they relied largely on OSC’s input in justifying 
the sole- source order and determining MPRI’s price to be reasonable 
and that they were unaware that the OSC officials had performed 
contracting-related duties. They told us that they are now paying 
particular attention to requests from their customers, including OSC, 
for sole-source orders. OSC officials said that they relied on ARC’s 
expertise, as their contracting office, to ensure that proper 
contracting procedures were followed. 

The tasks specified in the statement of work for the consultant that 
OSC hired as an intermittent employee and that he completed before his 
departure were consistent with Office of Personnel Management criteria 
for appropriate uses of expert and consultant appointments. The 
intermittent employee was tasked with two major lines of work related 
to efficiency and curriculum development. OSC management expressed 
confidence in the individual’s qualifications and was within its 
discretion to both hire him and set his level of compensation. 
 
While OSC employees, like other federal employees, are protected 
against prohibited personnel practices and may seek redress from OSC in 
making such allegations, this option becomes unworkable because of 
potential conflicts of interest when an OSC employee raises such an 
allegation of a prohibited personnel practice against either of the two 
top OSC officials. Two other federal agencies with redress roles, the 
Merit Systems Protection Board (MSPB) and the Equal Employment 
Opportunity Commission, have taken steps to address potential conflicts 
of interest when their own employees use their agency’s respective 
redress processes. Steps could be taken to ensure that OSC employees 
have alternative avenues of recourse; for example, they could have an 
external investigation conducted through an independent body or broader 
appeal rights to the MSPB. OSC could not independently implement these 
options, and would need to be given authority to do so. 

What GAO Recommends: 

We recommend that the Director of ARC’s Division of Procurement ensure 
that documents prepared by program offices are carefully reviewed for 
compliance with competition requirements. We also recommend that the 
Special Counsel put in place procedures to ensure that only authorized 
officials act as contracting officer’s representatives. ARC and OSC 
agreed with our recommendations. However, OSC suggested several changes 
based on their concerns with other aspects of the report. We believe 
our report is accurate as written. 

Congress should consider granting OSC employees alternative means of 
addressing prohibited personnel practice allegations when they involve 
the two top OSC officials. 

www.gao.gov/cgi-bin/getrpt?GAO-06-16. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact George H. Stalcup at 
(202) 512-9490 or stalcupg@gao. gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Order for Organizational Assessment Did Not Comply with Rules: 

Tasks Specified for OSC-Appointed Intermittent Employee Were Consistent 
with OPM Criteria: 

Redress Actions for OSC Employees Are Not Workable in Certain Cases; 
Other Agencies Have Developed Procedures for Internal Cases: 

Additional Redress Options Could Be Made Available to OSC Employees: 

Conclusions: 

Matter for Congressional Consideration: 

Recommendations for Executive Action: 

Agency Comments: 

Appendixes: 

Appendix I: Comments from the Office of Special Counsel: 

Appendix II: Comments from the Administrative Resource Center, Bureau 
of the Public Debt, U.S. Department of the Treasury: 

Letter November 17, 2005: 

Congressional Requesters: 

The Office of Special Counsel (OSC) is charged with safeguarding the 
merit system by protecting federal employees from prohibited personnel 
practices, such as retaliation against whistleblowing, discrimination, 
and nepotism.[Footnote 1] If an employee, former employee, or applicant 
for employment in the federal government believes that a prohibited 
personnel practice has occurred, that individual may file a complaint 
with OSC.[Footnote 2] In March 2004, we reported that OSC had not been 
consistently processing its cases within statutory time limits, 
creating backlogs.[Footnote 3] In January 2005, in part to reduce these 
backlogs, the Special Counsel created a plan to reorganize OSC offices 
and change certain internal procedures. 

You raised some questions about certain actions taken as part of OSC's 
plan, including OSC's sole-source procurement of an organizational 
assessment from a management consulting company and the hiring of an 
intermittent employee to perform consulting services. Additionally, you 
had questions about redress options that were available to OSC 
employees who might want to file a prohibited personnel practice 
allegation against OSC. This report responds to your interest by 
assessing (1) whether required practices and procedures were followed 
in contracting for the services of a management consulting company to 
conduct an organizational assessment, (2) whether OSC followed required 
procedures and policies when it hired an individual to perform 
consulting services on an intermittent basis, (3) the avenues of 
redress available to OSC employees who wish to file prohibited 
personnel practice allegations and how two other federal agencies with 
redress roles handle complaints by their employees against their 
agency, and (4) other redress options that could be made available to 
OSC employees. 

To assess OSC's actions related to contracting for the organizational 
assessment, we reviewed OSC's memorandum of understanding with the 
Administrative Resource Center (ARC), an office within the U.S. 
Department of the Treasury's Bureau of the Public Debt, to provide 
procurement assistance to OSC for a fee. We reviewed the task order 
that ARC issued to the company on behalf of OSC, as well as other 
documents, such as OSC's sole-source justification and the company's 
statement of work. We reviewed relevant sections of the Federal 
Acquisition Regulation (FAR) and the General Services Administration's 
(GSA) ordering procedures, in effect at the time the order was placed, 
for Schedule contracts.[Footnote 4] We met with current and former OSC 
officials knowledgeable about the procedures that were followed in 
selecting the company to do the organizational assessment. We also 
interviewed contracting officials at ARC. For our work on the hiring of 
the intermittent employee, we reviewed relevant Office of Personnel 
Management (OPM) criteria, as well as documents related to this 
particular hiring process and the individual's completed work at OSC. 
We also obtained data from OSC officials on general personnel policies 
and procedures for making expert and consultant appointments. However, 
we did not assess the employee's qualifications to perform the tasks 
specified in the statement of work. 

In developing information on the process that OSC employees follow when 
making prohibited personnel practice allegations against OSC, we 
reviewed current OSC policies and procedures and met with current and 
former OSC officials. We also met with officials from the Merit Systems 
Protection Board (MSPB) and the Equal Employment Opportunity Commission 
(EEOC) to determine how they handle their own employees' appeals or 
complaints against their agency. Finally, we discussed potential 
redress options for OSC employees with numerous OSC officials, former 
and current, as well as MSPB and EEOC staff. We conducted our review 
from February 2005 through August 2005 in accordance with generally 
accepted government auditing standards. 

Results in Brief: 

ARC did not satisfy competition requirements in issuing a $140,000 sole-
source task order for an organizational assessment, at OSC's request, 
to the consulting firm Military Professional Resources, Inc. 
(MPRI).[Footnote 5] The required justification for waiving competition 
was not a convincing demonstration of why a sole-source order was 
necessary. It did not explain how MPRI was determined to be uniquely 
qualified to perform the work. In addition, neither ARC, which was 
responsible for doing so, nor OSC documented that MPRI's price was 
determined to be reasonable. Finally, OSC officials performed duties, 
normally done by contracting officer's representatives, without 
authorization or training and, further, performed other duties that 
should have been reserved for the contracting officer, such as 
soliciting proposals and negotiating the price with MPRI. As the 
contracting office for OSC, ARC is responsible for ensuring that any 
justification for waiving competition is adequate and that proper 
contracting procedures are followed. ARC officials said they relied 
largely on OSC's input in justifying the sole-source order and 
determining MPRI's price to be reasonable. They were unaware that the 
OSC officials had performed the duties of contracting officer's 
representatives. They told us that they are now paying particular 
attention to requests from their customers, including OSC, for sole-
source orders. OSC officials said that they relied on ARC's expertise, 
as their contracting office, to ensure that proper contracting 
practices were followed. We are making recommendations to OSC and ARC 
to help ensure that the problems we identified do not occur in the 
future. 

OSC also hired an intermittent employee on March 17, 2004. The tasks 
specified in the employee's statement of work and that he completed 
before his departure were consistent with OPM criteria for appropriate 
uses of expert and consultant appointments. The consultant, who was 
employed on an intermittent basis, was tasked with two major lines of 
work related to efficiency and curriculum development. OSC management 
expressed confidence in the individual's qualifications and was within 
its discretion to both hire him and set his level of compensation. 

While OSC employees, like other federal employees, are protected 
against prohibited personnel practices and may seek redress from OSC in 
making such allegations, this option becomes unworkable when an OSC 
employee raises such an allegation of prohibited personnel practice 
against the two top officials of OSC--the Special Counsel or the Deputy 
Special Counsel. This was recently illustrated when two prohibited 
personnel practice complaints were filed against the Special Counsel. 
Citing a potential conflict of interest, the complainants requested 
that the cases be forwarded to the President's Council on Integrity and 
Efficiency (PCIE),[Footnote 6] as an independent third party for 
review. While OSC policies and procedures do not provide specific 
options to OSC employees in such cases, this case was subsequently 
forwarded to the PCIE. Two other federal agencies with redress roles, 
the MSPB and the EEOC, have taken steps to address potential conflicts 
of interest when their own employees use their agencies' respective 
redress processes. However, OSC would need specific authority to 
implement options, such as establishing the right to an external 
investigation or broader appeal rights to the MSPB, since OSC does not 
have the mechanism to provide for such investigations and the MSPB 
appeals process is in statute. 

Due to the unique nature of OSC and the difficulties involved when a 
prohibited personnel practice allegation is made against the Special 
Counsel or the Deputy Special Counsel, Congress should consider 
affording OSC employees (and former employees and applicants for 
employment) alternative means of addressing prohibited personnel 
practice allegations other than going through OSC. These means could 
include establishing (1) a right to an external investigation through 
an independent entity, where the entity would forward its findings to 
the President, who would decide the appropriate action, as is done when 
OSC handles allegations of prohibited personnel practices against 
Senate-confirmed presidential appointees; or (2) an expansion of the 
personnel actions that could be the basis for an appeal directly to the 
MSPB. 

Both ARC and OSC agreed with our recommendations. OSC expressed concern 
that some facts were not mentioned in the report and questioned the 
tone of the section pertaining to the sole-source order with MPRI. OSC 
suggested several wording changes to the report. While we clarified our 
wording in several places based on close-out discussions with OSC 
officials, we did not make the changes suggested by OSC in its comment 
letter because they were not supported by the evidence we developed 
during our review and OSC did not provide any additional evidence in 
its comments. 

Background: 

OSC, which does not have in-house contracting staff, has an agreement 
with ARC, an office within Treasury's Bureau of the Public Debt, to 
provide contracting support for a fee. As a member of the Treasury 
franchise fund, ARC does not receive direct appropriated funds, but 
instead relies on revenue from its federal agency customers to pay 
organizational expenses. Franchise funds are government-run, self-
supporting, business-like enterprises that provide a variety of common 
administrative services, such as payroll processing, information 
technology support, and contracting.[Footnote 7] 

The agreement between ARC and OSC is a mechanism for interagency 
contracting. This type of fee-for-service procurement process generally 
involves three parties: the agency requiring a good or service, the 
agency placing the order or awarding the contract, and the contractors 
that provide the goods and services. The requiring agency officials 
determine the goods or services needed and, if applicable, prepare a 
statement of work, sometimes with the assistance of the ordering 
agency. The contracting officer at the ordering agency ensures that the 
contract or order is properly awarded or issued (including any required 
competition) and administered under applicable regulations and agency 
requirements. If contract performance will be ongoing, a contracting 
officer's representative--generally an official at the requiring agency 
with relevant technical expertise--is normally designated by the 
contracting officer to monitor the contractor's performance and serve 
as the liaison between the contracting officer and the contractor. 
While interagency contracting can offer the benefits of improved 
efficiency and timeliness, this approach needs to be effectively 
managed. Due to the challenges associated with interagency contracts, 
we recently designated interagency contracting as a governmentwide high-
risk area.[Footnote 8] 

As authorized by OSC's appropriation, OSC may use 5 U.S.C. § 3109 to 
hire intermittent consultants.[Footnote 9] Section 3109 permits 
agencies, when authorized by an appropriation or other statute, to 
acquire the temporary or intermittent services of experts or 
consultants. Under the statute, appointments of experts and consultants 
may be made without regard to competitive service provisions and 
classification and pay requirements. Individuals appointed under this 
authority may not be paid in excess of the highest rate payable for a 
GS-15 unless a higher rate is expressly provided for by statute or an 
appropriation. Under section 3109, OPM is responsible for prescribing 
criteria governing circumstances in which it is appropriate to employ 
an expert or consultant and for prescribing criteria for setting pay. 

Section 3109 of title 5 and OPM's implementing regulations in 5 C.F.R. 
Part 304 provide for broad discretion in the appointment of experts and 
consultants. In promulgating its regulations, OPM recognized that 
agencies need to obtain outside opinion and expertise to improve 
federal programs, operations, and services and that by bringing in the 
talent and insights of experts and consultants, agencies can work more 
economically and effectively.[Footnote 10] 

OSC's primary mission is to protect federal employees from prohibited 
personnel practices. It carries out this mission by conducting 
investigations, attempting informal resolution through discussions with 
the agency during the investigation phase (or by offering mediation), 
and, when necessary, prosecuting corrective and disciplinary actions 
before the MSPB. An individual may also request that the Special 
Counsel go before the MSPB to seek to delay an adverse personnel 
action, such as a termination, pending an OSC investigation. If an 
agency fails to remedy a prohibited personnel practice upon request by 
OSC, corrective action may be obtained through litigation before the 
MSPB. OSC may also seek disciplinary action against an employee 
believed to be responsible for committing a prohibited personnel 
practice by filing a complaint with the MSPB. However, when the 
disciplinary action involves presidential appointees (subject to Senate 
confirmation), OSC forwards its complaint against the appointee, a 
statement of supporting facts, and any response of the appointee to the 
President for appropriate action.[Footnote 11] 

Obtaining the assistance of OSC may be an individual's only recourse 
with regard to an alleged prohibited personnel practice, unless the 
individual can pursue the matter with the MSPB or through the 
discrimination complaint process. Only employees who have been subject 
to an adverse action, such as a termination, demotion, or suspension 
beyond 14 days, may appeal to the MSPB and argue that such adverse 
action was the result of a prohibited personnel practice. An employee 
would not be able to go directly to the MSPB to complain that a 
geographic relocation was the result of a prohibited personnel 
practice. Even when an employee alleges that he or she was retaliated 
against for whistleblowing, he or she must first go to OSC and wait 120 
days before filing directly with the MSPB, unless that employee was 
subject to an adverse action as noted above. An employee may also 
pursue resolution of a prohibited personnel practice through the 
federal equal employment opportunity (EEO) process if the prohibited 
practice relates to discrimination covered under the antidiscrimination 
laws enforced by the EEOC.[Footnote 12] 

Order for Organizational Assessment Did Not Comply with Rules: 

In contracting with MPRI for the organizational assessment, several 
required steps were not taken: 

* competition was not sought among Schedule vendors, and there was no 
convincing demonstration of why a sole-source order was necessary, 

* the determination of the reasonableness of MPRI's price was not 
documented, and: 

* OSC officials performed duties normally done by contracting officer's 
representatives without authorization or training and, further, 
performed other duties that should have been reserved for the 
contracting officer. 

No Competition Was Sought and Waiver Lacked Credibility: 

Contracting officers are generally required by the Competition in 
Contracting Act[Footnote 13] to promote and provide for full and open 
competition in soliciting offers and awarding government contracts. Use 
of GSA's Schedule program is considered a competitive procedure as long 
as the procedures established for the program are followed.[Footnote 
14] In this instance, GSA's procedures required ordering offices to 
prepare a request for quotes and evaluate contractor catalogs and price 
lists, transmit the request to at least three contractors, and after 
evaluating the responses, place the order with the Schedule contractor 
that represented the best value. GSA's Schedule for Management, 
Organizational and Business Improvement Services (MOBIS), under which 
the MPRI task order was issued, includes these special ordering 
procedures. At the time the MPRI order was placed (April 2004), neither 
the FAR nor GSA's ordering procedures explicitly provided for sole-
source orders under GSA Schedule contracts. However, ordering offices 
could meet competition requirements by properly justifying such an 
order.[Footnote 15] 

Rather than follow the required GSA special ordering procedures by 
placing the task order competitively on behalf of OSC, ARC approved a 
written sole-source justification prepared by OSC. The justification 
stipulated that the required services were available from only one 
responsible source--MPRI--and no other contractor could satisfy agency 
requirements. When supplies or services are available from only one 
responsible source and no other type of supplies or services will 
satisfy agency requirements, full and open competition need not be 
provided for.[Footnote 16] However, the justification merely asserted 
that "no other contractor except MPRI, Inc. has the experience and 
background in this type of sensitive assessment." It did not contain 
sufficient facts and rationale to justify a sole-source order and did 
not provide the minimum required information.[Footnote 17] 

For example, the justification did not: 

* demonstrate that the proposed contractor's unique qualifications or 
the nature of the acquisition required an exception to full and open 
competition, 

* describe efforts made to ensure that offers were solicited from as 
many potential sources as practicable, 

* determine that the anticipated cost would be fair and reasonable, or: 

* describe the market research conducted and the results. 

The only support in OSC's justification for the statement that MPRI was 
uniquely qualified for the task is a statement that "an informal market 
survey reveals that only MPRI has the demonstrated past performance in 
bringing together the required unbiased and highly ethical subject 
matter experts to complete this type of assessment in the time 
allocated." However, the cited market survey does not provide a 
credible foundation for the conclusion that only MPRI could perform the 
work. The Special Counsel and his Deputy asked three vendors, including 
MPRI, for presentations. OSC officials could not recall how these three 
vendors were selected, and no documentation was available--such as a 
request for quotes--that set forth the requirement to which the vendors 
were responding. Rather, the request was communicated orally to the 
vendors. OSC provided us with proposals submitted by two of the vendors 
and stated that MPRI submitted a statement of work as its proposal. 
This statement of work subsequently became part of ARC's official 
contract file. We found that the summary statement of OSC's requirement 
and the scope of work differ among the three proposals. OSC officials 
explained that the two vendors' proposals were not well-matched to what 
the Special Counsel had communicated to them as OSC's requirements and 
that MPRI offered a "no-frills" approach that met OSC's needs. 
Nevertheless, in the absence of a documented request for quotes or 
other solicitation tool, it is not possible to determine whether MPRI 
and the other vendors were responding to the same set of requirements. 
Further, our recent search of GSA's Web site revealed that 1,668 
vendors (1,163 of them small businesses) had contracts under GSA's 
MOBIS schedule, many of which could have potentially performed the 
required services. 

The sole-source justification listed other factors as well. It stated 
that "there is insufficient time and no contractor's [sic] currently 
have the expertise to meet Government's requirements given the required 
budget limitations." There is no explanation in the justification as to 
why only this contractor could perform the task within the required 
time frame. In fact, despite the reference to urgency, 3 days before 
the period of performance was to end, OSC asked ARC to change the 
required completion date, almost doubling the time frame from 3 to 5-˝ 
months (with no increase in price). While acknowledging that the final, 
written report was a contract deliverable in the statement of work, OSC 
officials explained that MPRI met their needs within the 3-month period 
by providing a briefing on its findings that enabled OSC to begin 
addressing the problems that had been identified. Further, contracting 
without providing for full and open competition cannot be justified on 
the basis of concerns related to the amount of funds 
available.[Footnote 18] Thus, the justification's reference to budget 
constraints necessitating a sole-source order is not a valid 
rationale.[Footnote 19] 

ARC contracting officials did not question or validate OSC's 
justification, but told us they relied to a great extent on OSC's input 
in justifying the sole-source order. They said that they are now paying 
closer attention to requests from customer agencies, including OSC, for 
sole-source orders. OSC officials told us that, because ARC did not 
raise questions about the justification, they assumed it was adequate. 

Price Reasonableness Determination Not Documented: 

A sole-source justification is required to document a determination by 
the contracting officer that the anticipated cost to the government 
will be fair and reasonable. Neither ARC, which was responsible for 
doing so, nor OSC adequately documented that MPRI's price was 
reasonable. Although vendors' GSA Schedule labor rates have already 
been determined by GSA to be fair and reasonable, ordering agencies are 
required to evaluate the contractor's price for orders requiring a 
statement of work. The contractor's price is based on the labor rates 
in the Schedule contract, the mix of labor categories, and the level of 
effort required to perform the services. Normally, when ordering 
services from GSA Schedules that require a statement of work, the 
ordering office is responsible for evaluating the contractor's level of 
effort and mix of labor proposed to perform the specific tasks being 
ordered and for making a determination as to whether the price is 
reasonable. 

ARC officials told us that they relied on OSC to conduct the price 
reasonableness assessment by reviewing a breakout of MPRI's price by 
skill mix, number of hours, and rates for each labor category. They 
maintain that the minimum requirements for price reasonableness 
documentation were met. However, we found no documentation 
demonstrating that the required price evaluation had been performed. 
OSC officials stated that the informal market survey was adequate to 
determine MPRI's price as reasonable because MPRI's price--which the 
Deputy Special Counsel negotiated with the vendor--was lower than the 
other vendors' prices. However, the absence of a solicitation 
instrument that would show all three vendors responded to the same 
requirement, and the disparities in the vendors' proposed scopes of 
work, do not support OSC's assertion. 

Unauthorized OSC Officials Performed Duties of Contracting Officer's 
Representatives: 

One of the contracting officer's key responsibilities is ensuring that 
the government monitors the contractor's performance. The contracting 
officer, in this case ARC, may designate a contracting officer's 
representative in the requiring agency, in this case OSC, to act as the 
contracting officer's technical expert and representative in the 
monitoring and administration of a contract or task order. ARC's 
standard designation letter to contracting officer's representatives 
outlines the scope of these responsibilities, including such things as 
monitoring the contractor's performance, representing the government in 
meetings with the contractor, keeping the contracting officer informed, 
and reviewing the contractor's invoices. ARC follows Treasury's 
training program for contracting officer's representatives, which 
consists of a basic acquisition course of at least 24 hours that 
includes pre-award, post-award, and procurement ethics training. 

ARC contracting staff named OSC's former human resource chief, who had 
taken the required training, as the contracting officer's 
representative for the MPRI task order.[Footnote 20] However, two other 
OSC officials not named by ARC, the Special Assistant and Director of 
Management and Budget and the Deputy Special Counsel, who had not 
received the training, effectively acted in the role of contracting 
officer's representatives on the MPRI order.[Footnote 21] In an April 
20, 2004, e-mail to OSC staff, the Special Counsel named the Special 
Assistant as the liaison between the agency and the contractor. The 
statement of work names this official as the "governing authority" for 
the effort and as responsible for coordinating with the contractor on 
"any other direct costs" and certain travel requirements. Also, the 
Deputy Special Counsel was responsible for approving MPRI's contract 
execution plan and the contract deliverables. 

Further, ARC's delegation letter to contracting officer's 
representatives prohibits the delegation of or responsibility for 
certain duties, such as soliciting proposals, making commitments or 
promises to a contractor relating to the award of a contract, and 
negotiating the price with the contractor. The Special Counsel and 
Deputy Special Counsel, as discussed above, solicited proposals from 
three vendors, and the Deputy negotiated the final price with MPRI, 
functions that should have been performed by the ARC contracting 
officer. 

ARC contracting staff were not aware that the OSC officials had 
performed these duties until we informed them. They said that only the 
former human resource chief had received the training and authorization 
to act as a contracting officer's representative. OSC officials said 
that ARC, as their contracting office, never told them they were not 
following proper contracting practices. 

Tasks Specified for OSC-Appointed Intermittent Employee Were Consistent 
with OPM Criteria: 

The tasks specified in the statement of work for the consultant that 
OSC hired on March 17, 2004, and that he completed before his departure 
were consistent with OPM criteria for appropriate uses of expert and 
consultant appointments. The employee, who was employed on an 
intermittent basis, was tasked with two major lines of work related to 
efficiency and curriculum development. OSC management expressed 
confidence in his qualifications and used its discretion to both hire 
him and set his compensation rate. 

OSC Gave Intermittent Employee Two Significant Tasks and Said Pay Was 
Based on Qualifications: 

OPM regulations permit agency heads to establish expert or consultant 
pay rates, but in doing so to consider specified factors, including 
level of difficulty of the work, qualifications of the expert or 
consultant, and pay rates of individuals performing comparable 
work.[Footnote 22] At the suggestion of the Special Counsel, OSC 
officials hired Alan J. Hicks as an intermittent employee on March 17, 
2004, using the appointment authority under 5 U.S.C. § 3109. According 
to the appointment paperwork, Mr. Hicks's appointment was to last from 
March 17, 2004, until March 16, 2005, and he was to work an 
intermittent schedule. His pay rate was set slightly below the highest 
rate for a GS-15.[Footnote 23] Mr. Hicks resigned his appointment 
effective October 24, 2004. During the 7 months Mr. Hicks was employed 
by OSC, he worked a total of 123 hours for a total of $6,621.09 in pay. 

Before hiring Mr. Hicks, the Special Counsel identified him as a 
possible consultant based on prior knowledge of Mr. Hicks's work as the 
headmaster of a private secondary school. The Deputy Special Counsel 
told us that he justified Mr. Hicks's pay on the basis of his 
qualifications--specifically, his experience as headmaster and his 
educational level.[Footnote 24] He also noted that the Special Counsel 
had worked with Mr. Hicks and respected his opinion and judgment. 
According to Mr. Hicks's resume, during the 10 years of his headmaster 
position, he was responsible for a number of administrative functions, 
including designing and writing student curricula, recruiting and 
training faculty and staff, establishing financial and organizational 
structures of the school, hiring and management decisions, as well as 
teaching history, logic, and biology. According to his resume, Mr. 
Hicks had also taught at the college level. 

Statement of Work and Duties Actually Performed by Intermittent 
Employee Were Consistent with OPM Criteria: 

OPM regulations provide that agencies may appoint qualified experts or 
consultants to an expert or consultant position that requires only 
intermittent and/or temporary employment.[Footnote 25] While OPM 
regulations do not establish specific criteria for determining 
qualifications, they do generally describe the expectations for such 
positions and what constitutes appropriate tasks for experts and 
consultants to perform. For example, the regulations describe a 
consultant as a person who can provide valuable and pertinent advice 
generally drawn from a high degree of broad administrative, 
professional, or technical knowledge or experience. Furthermore, a 
consultant position is one that requires providing advice, views, 
opinions, alternatives, or recommendations on a temporary or 
intermittent basis on issues, problems, or questions presented by a 
federal official. The regulations also provide examples of 
inappropriate uses of expert/consultant appointments, including work 
performed by the agency's regular employees. 

Mr. Hicks's tasks were related to addressing OSC's backlog that we 
identified in our March 2004 report.[Footnote 26] Specifically, an OSC 
official noted that his experience in curricula development at the 
boarding school was viewed as key to cross-train employees in different 
units so those employees could be utilized in a number of ways to 
address workload. According to the OSC official, Mr. Hicks's efforts 
would complement those of MPRI. The official said he was confident that 
Mr. Hicks was fully qualified to do the work, and that OSC used 
management discretion to approve the appointment. Another official 
observed that Mr. Hicks provided both an outside perspective and 
experience that regular OSC staff did not have. Officials also said 
that although Mr. Hicks only worked at OSC for a short time, the agency 
was pleased with the value he added. 

Both the duties set out in Mr. Hicks's statement of work, as well as 
those duties he actually performed, were consistent with OPM 
regulations. According to the statement of work prepared by the human 
resource chief at the Deputy Special Counsel's direction, Mr. Hicks was 
to (1) review and analyze OSC program policies and procedures for 
efficiency and make recommendations and develop written revisions to 
these policies and procedures and (2) develop a long-term training 
curriculum and deliver training. Shortly before he terminated his 
consultant work for OSC, Mr. Hicks submitted a report outlining the 
work that he performed. In his report, Mr. Hicks made a number of 
observations on his concurrence with MPRI's conclusions. The report 
also said he was involved in a number of other tasks, including: 

* examining operational training manuals, 

* meeting with staff concerning the procedures for handling 
whistleblower disclosure complaints, 

* assisting with and attending the Special Counsel's testimony before a 
congressional subcommittee, 

* preparing a paper for presentation at a staff retreat on 
philosophical matters related to work, 

* meeting with MPRI to discuss its assessments and to share his 
observations based on his work, and: 

* having numerous conversations with the Special Counsel concerning the 
assessment team, his recommendations for curriculum and training, and 
the need for streamlined procedures. 

While most of the tasks that Mr. Hicks actually performed were 
consistent with those enumerated in his statement of work, Mr. Hicks 
also worked on whistleblower disclosure cases.[Footnote 27] According 
to an OSC official, Mr. Hicks spent approximately 25 percent of his 
time working through 50 disclosure case files. The OSC official stated 
that Mr. Hicks was not provided disclosure case files that contained 
sensitive information for which a security clearance would have been 
required. 

While Mr. Hicks noted in his report that this work on the disclosure 
cases "served the dual purpose of analysis of procedures and a 
reduction of backlog," an OSC official stated that Mr. Hicks's efforts 
were related to an analysis of the process of handling disclosures and 
not the type of efforts OSC's disclosure unit employees perform in 
handling such cases. According to the OSC official, while Mr. Hicks 
contacted some of the whistleblowers directly, it was for the purpose 
of determining those individuals' impressions about the process. This 
official stated that these activities were performed at the initiative 
of the Special Counsel and his senior staff, in order for Mr. Hicks to 
gain a better understanding of those processes and procedures specified 
in the statement of work. This official stated that prior to Mr. 
Hicks's arrival at OSC, the Special Counsel forwarded to Mr. Hicks 
statutory provisions on OSC's duties relating to disclosures from 
whistleblowers, including the obligation of OSC to maintain the 
confidentiality of a whistleblower's identity.[Footnote 28] 

Redress Actions for OSC Employees Are Not Workable in Certain Cases; 
Other Agencies Have Developed Procedures for Internal Cases: 

Although OSC employees, like other federal employees, can seek redress 
for alleged prohibited personnel practices through OSC, this may be 
unworkable for OSC employees in certain circumstances. Two other 
agencies with redress roles, MSPB and EEOC, have acknowledged the need 
to avoid conflicts when their employees have complaints and have taken 
steps to avoid such conflicts when their employees use their agency's 
respective redress processes. 

Seeking Redress through OSC Can Be Unworkable for OSC Employees for 
Allegations Against the Special Counsel or Deputy Special Counsel: 

Title 5 of the United States Code protects federal employees, including 
OSC employees, from prohibited personnel practices.[Footnote 29] OSC 
employees who believe that a prohibited personnel practice has occurred 
may seek redress from OSC. OSC employees may also seek redress through 
appealing adverse actions to the MSPB and filing EEO complaints. 

According to OSC officials, there are two ways in which an OSC employee 
could bring a prohibited personnel practice allegation within OSC. 
First, OSC employees may use the agency's administrative grievance 
system.[Footnote 30] If fact-finding is needed for a complaint filed 
against OSC staff, an OSC employee who has not been involved in the 
matter being grieved and, when possible, does not occupy a position 
subordinate to any official involved in the matter being grieved, is 
selected to conduct a review and prepare a report. Ideally, that 
employee is also located in a different geographic area; for example, 
an OSC employee in Dallas could be assigned to a complaint filed in 
Washington, D.C. OSC officials stated that this would ensure 
objectivity and independence in the processing of the complaint. Fact-
finding is conducted informally and includes the collection of 
documents and statements of witnesses, as necessary. The grievant's 
second-level supervisor would render a decision based upon the fact-
finder's report and any comments on the report provided by the 
grievant. The grievant may appeal this decision to the Deputy Special 
Counsel, or, if the matter was grieved to the Deputy Special Counsel in 
the first instance, to the Special Counsel. Both current and former OSC 
officials stated that this process could be successfully used when the 
prohibited personnel practice allegation relates to the actions of an 
official below the Deputy Special Counsel level. However, if the 
administrative grievance system were to be used to address grievances 
against the Special Counsel or the Deputy Special Counsel, there would 
be a conflict of interest since the final decision maker in this 
process is the Special Counsel. 

Second, OSC officials stated that OSC employees who believe a 
prohibited personnel practice has occurred can file a complaint with 
OSC in the same fashion as an individual from outside OSC. However, OSC 
employees do not have an outside agency to represent them in an 
independent manner--the role that OSC plays for non-OSC employees in 
cases involving prohibited personnel practices. When an employee raises 
a prohibited personnel practice allegation against the Special Counsel, 
addressing such an allegation within OSC becomes unworkable because, 
OSC officials stated, all OSC employees ultimately report to the 
Special Counsel. OSC officials also stated that there cannot be an 
independent review when the employee performing the investigation 
reports to the individual being investigated. According to former and 
current OSC officials, the difficulty also extends to allegations 
against the Deputy Special Counsel because the Deputy Special Counsel, 
who is typically a noncareer senior executive, has a confidential 
relationship with the Special Counsel. 

According to the previous Special Counsel, an effort among senior staff 
to establish procedures for handling OSC employee allegations of 
prohibited personnel practices against senior OSC officers, including 
the Special Counsel, was initiated during her tenure. However, the 
effort was not completed, she said, noting that OSC staff did not reach 
a consensus over what the alternative process should be for handling 
complaints against the Special Counsel. The previous Special Counsel 
and current OSC officials who were involved in this effort told us that 
one of the options being considered was to have the matter investigated 
by an outside inspector general. At the time, however, concern was 
expressed about allowing inspectors general, who were subject to OSC's 
investigative and prosecutorial authority, to investigate the Special 
Counsel. 

Investigation of Allegations Against the Special Counsel Was Sent to 
the Integrity Committee of the PCIE: 

The potential difficulties described above were recently illustrated 
when a complaint was filed anonymously against the Special Counsel on 
behalf of a number of OSC employees.[Footnote 31] The complainants 
requested that the complaint be referred to the chairman of the PCIE 
for an independent investigation, including a recommendation for 
corrective or disciplinary action. The PCIE is an interagency council, 
including presidentially appointed inspectors general, charged with 
promoting integrity and efficiency in federal programs.[Footnote 32] 
The complaint stated that OSC could not investigate these allegations 
because the Special Counsel could not oversee an investigation of which 
he is the subject and that all OSC staff are his subordinates. The 
complaint further observed that the complainants' ability to remain 
anonymous would be jeopardized if any OSC staff were assigned to work 
on the investigation. As discussed above, current OSC policy and 
procedures do not provide for special handling of complaints against 
the Special Counsel or the Deputy Special Counsel. The Deputy Special 
Counsel told us that he and the Special Counsel agreed that OSC should 
not handle the complaint, and subsequently forwarded it to the PCIE's 
Integrity Committee and notified the chair of the PCIE.[Footnote 33] In 
mid-October, 2005, the chair assigned OPM's inspector general to 
conduct the investigation. 

Other Agencies with Redress Roles Have Addressed Procedures for 
Complaints Against Them by Their Own Employees: 

Two other agencies in the executive branch with major roles in ensuring 
the protection of employee rights, the MSPB and EEOC, have taken steps 
to address potential conflicts of interest when their own employees use 
their agencies' respective redress processes. 

The MSPB is an independent quasi-judicial agency established to protect 
federal merit systems against prohibited personnel practices and to 
ensure adequate protection for employees against abuses by agency 
management. MSPB carries out this mission, in part, by adjudicating 
federal employee appeals of adverse personnel actions. 

The MSPB has developed regulations which state that MSPB employee 
appeals are not to be heard by board-employed administrative judges who 
hear appeals from employees of other federal agencies, but instead are 
to be heard by administrative law judges (ALJ).[Footnote 34] According 
to the MSPB General Counsel, MSPB does not employ its own ALJs; rather, 
MSPB has a memorandum of understanding with the National Labor 
Relations Board to use its ALJs for MSPB employee appeals and other 
matters, including whistleblower retaliation cases brought by OSC. 

MSPB regulations further provide that the board's policy is to insulate 
the adjudication of its own employees' appeals from agency involvement 
as much as possible. The regulations provide that if an initial 
decision rendered by the ALJ is appealed to the board, the initial 
decision will not be altered unless there has been "harmful procedural 
irregularity" in the proceedings or there is a clear error of law. 
According to the MSPB General Counsel, this provides the board with 
very limited review authority. Finally, the regulations state what 
procedures are to be followed if a board member must recuse himself or 
herself from a specific case.[Footnote 35] 

The EEOC is responsible for enforcing the federal sector employment 
discrimination prohibitions contained in the federal antidiscrimination 
statutes, including Title VII of the Civil Rights Act of 1964, as 
amended.[Footnote 36] As part of this responsibility, EEOC provides for 
the adjudication of complaints and hearing of appeals. 

As is the case for all individuals who file a formal complaint of 
discrimination, EEOC employees may either request a hearing before an 
administrative judge or a final decision by the agency itself. However, 
according to EEOC officials, when EEOC employees request a hearing over 
their complaint of discrimination, such hearings are not to be 
conducted by the administrative judges employed by EEOC, but rather 
through contract administrative judges. EEOC officials state that using 
contract administrative judges is necessary to preserve the neutrality 
of the process, since EEOC's administrative judges are coworkers of any 
EEOC complainant. 

EEOC officials also told us that if an employee of its Office of Equal 
Opportunity (OEO), EEOC's own EEO office, raises an allegation of 
discrimination, the matter is sent outside the agency to another 
agency's EEO office for informal counseling, investigation, and/or 
mediation to guard against potential conflicts of interest within the 
OEO. 

Additional Redress Options Could Be Made Available to OSC Employees: 

Steps can be taken to ensure that OSC employees have alternative 
avenues of recourse when their prohibited personnel practice 
allegations involve the Special Counsel or the Deputy Special Counsel. 
Potential options are discussed below. However, unlike the MSPB and the 
EEOC, which have taken steps to address potential conflicts of interest 
when their own employees use their respective redress processes, OSC 
would need explicit authority for implementing such options. 

Independent Body Could Conduct External Investigation: 

OSC employees could be afforded an external investigation of their 
prohibited personnel practice allegations against the Special Counsel 
or Deputy Special Counsel through an independent entity. Most of the 
current and former OSC officials we spoke with acknowledged that the 
option of such an external investigation is warranted. If such an 
external investigation were authorized, it may be desirable to also 
provide the results of the investigation to the President, who has the 
authority to take appropriate corrective action. However, OSC would 
need specific authority to implement this option since OSC does not 
have the mechanism to provide for such investigations. 

OSC Employees Could Be Given Broader Appeal Rights to MSPB: 

OSC employees could be afforded expanded rights to appeal directly to 
MSPB that would specifically encompass prohibited personnel actions 
involving the Special Counsel or the Deputy Special Counsel. As 
discussed above, OSC employees, as is the case with other federal 
employees, can take allegations of prohibited personnel practices to 
the MSPB only when certain adverse actions have been taken against 
those employees. One OSC official observed that care should be taken in 
expanding jurisdiction so as to prevent minor personnel actions from 
being appealable to the board. Since the MSPB appeals process is in 
statute, this option would require legislation for implementation. 

Conclusions: 

OSC employees who believe a prohibited personnel practice has occurred 
can file a complaint with OSC in the same fashion as an individual from 
outside the agency. However, OSC employees do not have an external, 
independent agency like OSC to represent them. This becomes 
particularly important when the complaint is filed against the Special 
Counsel or the Deputy Special Counsel. When an employee raises a 
prohibited personnel practice allegation against the Special Counsel, 
addressing such an allegation within OSC becomes unworkable because OSC 
employees ultimately report to the Special Counsel, including the 
complainant and any staff who would conduct an internal investigation. 
This difficulty extends to allegations against the Deputy Special 
Counsel because this individual has a confidential relationship with 
the Special Counsel. Steps could be taken to ensure that OSC employees, 
who cannot effectively obtain the services of OSC in addressing 
allegations of prohibited personnel practices, have alternative avenues 
of redress. 

Adequate management oversight is critical to ensuring that, in an 
interagency contracting environment, the requiring agency and the 
agency ordering the services on its behalf work together to follow 
proper contracting procedures. In agreeing to issue the sole-source 
order for the organizational assessment despite the flawed 
justification, and in being uninvolved in and unaware of the pre-and 
post-award activities conducted by OSC officials, ARC contracting 
officials neglected to fulfill their responsibilities. For their part, 
OSC officials demonstrated a lack of awareness of their 
responsibilities in the process of engaging MPRI and overseeing the 
contractor's work. 

Matter for Congressional Consideration: 

Due to the unique nature of OSC and the difficulties involved when a 
prohibited personnel practice allegation is made against the Special 
Counsel or the Deputy Special Counsel, Congress should consider 
affording OSC employees (and former employees and applicants for 
employment) alternative means of addressing prohibited personnel 
practice allegations other than going through OSC. These means could 
include establishing (1) a right to an external investigation through 
an independent entity, where the entity would forward its findings to 
the President, who would decide the appropriate action, as is done when 
OSC handles allegations of prohibited personnel practices against 
Senate-confirmed presidential appointees; or (2) an expansion of the 
personnel actions that could be the basis for an appeal directly to the 
MSPB. 

Recommendations for Executive Action: 

We recommend that the Director of ARC's Division of Procurement take 
the following two actions to ensure that (1) documents prepared by 
program offices requesting contracting assistance--such as statements 
of work and sole-source justifications--are carefully reviewed for 
compliance with competition requirements and (2) ARC contracting staff, 
through regular communication with the program offices they support, 
ensure that only authorized program officials act as contracting 
officer's representatives. 

We also recommend that the Special Counsel put in place procedures to 
ensure that only those officials who have taken the required training 
and been designated as contracting officer's representatives act in 
that role and that program staff do not exceed their authority in 
interacting with contractors. 

Agency Comments: 

On September 23, 2005, we provided a draft of this report to OSC and to 
ARC for review and comment. OSC's written response is included in 
appendix I, and ARC's written response is included in appendix II. 

OSC and ARC agreed with our recommendations. However, OSC suggested 
several wording changes to the report and expressed concern about the 
tone of the section on the sole-source order with MPRI. While we 
clarified our wording in several places, we did not make other changes 
suggested by OSC in its comment letter for the reasons discussed below. 

OSC recommended we add a paragraph that, in addition to making 
reference to our earlier report on case backlogs at OSC (which is 
discussed in the first paragraph of our current report), would make 
other points that are already addressed in our report. Thus, we did not 
include OSC's suggested language. 

OSC pointed out that ARC, as the contracting office, did not question 
the sole-source justification and that, if it had done so, another 
approach could have been taken for the procurement. Our report already 
clearly reflects the fact that this was ARC's responsibility and that 
ARC contracting personnel did not question the validity of the sole-
source justification but, rather, relied on OSC's rationale. 

OSC suggested we revise the wording in our report to state that program 
staff participated in negotiations with MPRI, rather than state that 
the Deputy Special Counsel negotiated the price with the company. Our 
discussions with OSC officials--including one with the Deputy himself-
-support our finding that the Deputy negotiated the final price with 
MPRI, and we have added the word "final" to make that clear. There is 
no evidence that ARC "set the final price," as OSC suggests; rather, 
ARC issued a task order using the final price provided to it by OSC. 

OSC also took exception to our statements that the Deputy Special 
Counsel was responsible for approving MPRI's contract execution plan 
and contract deliverables and suggested we change the wording to "Also, 
OSC program officials were included in the approval process for MPRI's 
contract execution plan and contract deliverables." Again, the evidence 
supports our finding as stated in the report. In fact, the contract's 
statement of work names the Deputy as the contracting officer's 
representative, as the official responsible for approving MPRI's 
contract execution plan, and as the recipient of the contractor's 
monthly reports. Further, the contract execution plan is addressed to 
the Deputy and it identifies him as the contracting officer's 
representative. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the date of this letter. At that time, we will send copies of this 
report to OSC, the Bureau of the Public Debt, and interested parties. 
In addition, the report will be available at no charge on GAO's Web 
site at http://www.gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. If you or your staff have questions about this 
report, please call me at (202) 512-9490. Key contributors to this 
report included Kimberly Gianopoulos, Karin Fangman, Sharon Hogan, 
Michele Mackin, and Adam Vodraska. 

Signed by: 

George H. Stalcup: 
Director, Strategic Issues: 

List of Requesters: 

The Honorable Steny H. Hoyer: 
Minority Whip: 
House of Representatives: 

The Honorable Henry A. Waxman: 
Ranking Minority Member: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Danny K. Davis: 
Ranking Minority Member: 
Subcommitee on Federal Workforce and Agency Organization: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Edolphus Towns: 
Ranking Minority Member: 
Subcommittee on Government Management, Finance, and Accountability: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Barney Frank: 
Ranking Minority Member: 
Committee on Financial Services: 
House of Representatives: 

The Honorable Eliot L. Engel: 
House of Representatives: 

[End of section] 

Appendixes: 

Appendix I: Comments from the Office of Special Counsel: 

Appendix I: 

Comments from the Office of Special Counsel: 

U.S. OFFICE OF SPECIAL COUNSEL: 
1730 M Street, N.W. Suite 300: 
Washington, D.C. 20036-4505: 

www.osc.gov: 

October 25, 2005: 

The Honorable David M. Walker: 
Comptroller General of the United States: 
Government Accountability Office: 
441 G Street N.W. 
Washington, D.C. 20548: 

Re: Response to GAO Draft Report #GAO-06-16: 

Copy sent via facsimile to George Stalcup (202-512-4516) and original 
sent via First Class Mail: 

Dear General Walker: 

This letter is in response to the Government Accountability Office 
(GAO) Draft Report (#GAO-06-16), dated October 2005, on Selected 
Contracting and Human Capital Issues and supersedes my prior letter of 
October 12, 2005. We appreciate the opportunity to respond to the draft 
report. We agree with your U.S. Office of Special Counsel (OSC) 
recommendations but have some concerns about facts not mentioned in the 
draft report and recommend adding additional language. 

Recommendation for Executive Action: 

I fully concur with the recommendations on page 24. Since we became 
aware of the issue, it has been resolved. I will ensure that only those 
officials who have taken the required training and have been properly 
designated will act in the role of contracting officials. 

Requested Additions: 

We recommend adding the following paragraph to page 1 for context to 
the problems confronting OSC when I took office. 

Upon taking office as the new Special Counsel, in January 2004, one 
major issue confronted the Office of Special Counsel (OSC), a serious 
backlog of cases in all of the units within the agency, as documented 
in GAO Report (#GAO-04-36), dated March 2004, on case management-
related operations of the U.S. Office of Special. The highlights of 
this report stated that OSC had "not been consistently processing cases 
within statutory time limits, creating backlogs." GAO recommended "that 
the Special Counsel provide Congress with a detailed strategy designed 
to" reduce the backlog of cases. The backlog had plagued the agency for 
several years. The OSC Annual Report to Congress repeatedly discussed 
this problem. The MPRI sole source contract at issue was the first step 
in devising the strategy required by GAO and OSC, officials felt 
pressure to act quickly. 

Concerns: 

I do not believe the general tone of the section regarding the MPRI 
sole source contract properly reflects the complexity of the factual 
and legal setting. The following email was sent to GAO officials on 
September 6, 2005, without rebuttal, that accurately reflects OSC's 
position. 

There were several major points that we agreed upon, that were not in 
the initial Statement of Facts. The FAR makes it clear that ARC had the 
authority and responsibility to control the sole source issue. ARC at 
anytime could have prevented the contract from coming into effect. If 
the sole source justification wasn't sufficient, it was incumbent on 
ARC officials to begin a "dialogue" to ensure that it was sufficient. 
Then a case could be made or not. There would be no need for second 
guessing at this point. OSC officials even made it clear to ARC that 
OSC was relying on ARC's expertise in this area, since we had not 
worked in this area of law. We pay [ARC] $20,000 per year to provide 
this service, because OSC personnel do not have this type of training. 
The FAR states clearly that once ARC officials sign the sole sources 
justification, they "bought it." With all of this in mind, at no time 
did any ARC official inform any OSC official that the sole source 
justification wasn't sufficient or that there was a possible violation 
of a law, rule or regulation.. 

The draft report fails to adequately reflect procurement officials' 
facilitation and guidance of program staff involvement during the 
process. The following points represent slight changes to the draft 
language that would easily and sufficiently cure these deficiencies. 

* The language at page 11 first full paragraph needs more clarity "--
which the Deputy Special Counsel negotiated with the vendor--" and 
should be replaced with "--which program staff were involved discussing 
with the vendor because they were uninformed by responsible procurement 
staff-" 

* The language at page 12 at the bottom of page is imprecise "the 
Deputy negotiated a price with MPRI" and should be replaced with 
"program staff were involved with the negotiation process, yet 
procurement officials set the final price." 

* There is similar language at page 3, tenth line from the top "..and 
negotiating a price with MPRI." This clause would be more precise to 
read "..and involvement in the negotiation process." 

* The language at page 12, last sentence, first full paragraph is out 
of context: "Also, the Deputy Special Counsel was responsible for 
approving MPRI's contract execution plan and the contract 
deliverables." It should read as follows: "Also, OSC program officials 
were included in the approval process for MPRI's contract execution 
plan and contract deliverables." 

We again thank you for the opportunity to respond to GAO Draft Report 
(#GAO-06-16), dated October 2005, on Selected Contracting and Human 
Capital Issues. 

Sincerely, 

Signed by: 

Scott J. Bloch: 
Special Counsel: 

Appendix II: Comments from the Administrative Resource Center, Bureau 
of the Public Debt, U.S. Department of the Treasury: 

DEPARTMENT OF THE TREASURY: 
BUREAU OF THE PUBLIC DEBT: 
WASHINGTON. DC 20239-0001: 

October 5, 2005: 

Mr. George H. Stalcup: 
Director, Strategic Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Stalcup: 

I am writing to provide the Administrative Resource Center's (ARC) 
comments on the Government Accountability Office's draft report 
entitled U.S. OFFICE OF SPECIAL COUNSEL Selected Contracting and Human 
Capital Issues. ARC is one of several offices that I am responsible for 
within the Department of the Treasury's Bureau of the Public Debt. 

Recommendations: GAO recommended that the Director of ARC's Division of 
Procurement ensure that (1) documents prepared by program offices 
requesting contracting assistance, such as statements of work and sole-
source justifications, are carefully reviewed for compliance with 
competition requirements and (2) ARC contracting staff, through regular 
communication with the program offices they support, ensure that only 
authorized program officials act as contracting officer's 
representatives. 

Response: ARC Procurement will become even more vigilant in reviewing 
such documents and ensuring that only authorized personnel are 
participating in the administration of contracts. Also, ARC Procurement 
has a dedicated compliance team, reporting directly to the ARC 
Procurement Director, which will ensure that these areas receive an 
enhanced degree of consideration in future compliance reviews. 

Thank you for the opportunity to respond to the draft GAO report. If 
you have any questions or wish to discuss these comments further, 
please contact my office at (202) 504-3500. 

Sincerely, 

Signed by: 

Van Zeck: 
Commissioner: 

[End of section] 

(450400): 

Page 29 GAO-06-16 Selected Contracting and Human Capital Issues: 

(450400): 

FOOTNOTES 

[1] Prohibited personnel practices are specified in 5 U.S.C. § 2302(b). 

[2] 5 U.S.C. § 1214. OSC also carries out a number of other 
responsibilities, including handling whistleblower disclosure claims, 
advising federal and certain state and local employees concerning 
permissible political activities under the Hatch Act and handling 
alleged violations of that act, and handling complaints concerning the 
employment rights of individuals serving in the uniformed military 
service. 

[3] GAO, U.S. Office of Special Counsel: Strategy for Reducing 
Persistent Backlog of Cases Should Be Provided to Congress, GAO-04-36 
(Washington, D.C. Mar. 8, 2004). 

[4] Under the Schedule program, GSA establishes long-term 
governmentwide contracts with commercial firms to provide access to 
commercial supplies and services at volume discount pricing. Ordering 
agencies place delivery or task orders against these contracts. 

[5] MPRI is a wholly-owned subsidiary of L3 Communications, whose core 
competencies, according to the company, center on security sector 
reform, institution-building, leadership development, training, 
education, and emergency management. 

[6] The PCIE is an interagency council, including presidentially 
appointed inspectors general, charged with promoting integrity and 
efficiency in federal programs. 

[7] We recently issued a report on franchise funds: Interagency 
Contracting: Franchise Funds Provide Convenience, but Value to DOD is 
Not Demonstrated, GAO-05-456 (Washington, D.C. July 29, 2005). 

[8] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C. 
January 2005). 

[9] See Pub. L. No. 108-199, Consolidated Appropriations Act, 2004, 118 
Stat. 3, Division F-Transportation, Treasury, and Independent Agencies 
Appropriations, at 118 Stat. 339-340 (Jan. 23, 2004). See also, Pub. L. 
No. 108-447, Consolidated Appropriations Act, 2005, 118 Stat. 2809, 
Division H-Transportation, Treasury, Independent Agencies and General 
Government Appropriations, at 118 Stat. 3263-3264 (Dec. 8, 2004). 

[10] 59 Fed. Reg. 67232, Dec. 29, 1994. 

[11] 5 U.S.C. § 1215(b). 

[12] See GAO, Equal Employment Opportunity: SSA Region X's Changes to 
Its EEO Process Illustrate Need for Agencywide Procedures, GAO-03-604 
(Washington, D.C. July 2003), for a discussion of EEO laws applicable 
to federal employees and the process governing EEO complaints. 

[13] 41 U.S.C. § 253. 

[14] See FAR 6.102(d)(3) and 8.404(a). 

[15] Effective July 2004, new procedures in FAR 8.405-6 set forth 
criteria for documenting justification and approval of sole-source 
Schedule orders. 

[16] 41 U.S.C. § 253(c)(1); FAR 6.302-1. 

[17] FAR subpart 6.3 describes the minimum required information in 
justifying a sole-source award. The new procedures in FAR 8.405-6 for 
sole-source justification and approval of Schedule orders were not in 
effect at the time the OSC order was placed with MPRI. 

[18] 41 U.S.C. § 253(f)(5); FAR 6.301(c). 

[19] The sole-source justification cites an estimated cost of $110,000. 
However, the task order was issued in the amount of $140,000. OSC 
officials told us that the additional cost was for a human resource 
analysis that was added to the scope of the work. 

[20] This official retired in September 2004. 

[21] The Special Counsel's Special Assistant was certified as a 
contracting officer's representative on September 16, 2004, 2 weeks 
before the period of performance of the MPRI order ended. However, this 
official was never designated as a contracting officer's representative 
for the MPRI order, according to the ARC contracting officer. 

[22] 5 C.F.R. § 304.104. 

[23] Mr. Hicks's basic pay was set at $53.83 per hour; the maximum rate 
at the time of his appointment was $54.47 per hour. 

[24] Although the Deputy Special Counsel indicated that Mr. Hicks had a 
Ph.D., Mr. Hicks's resume showed that he had completed coursework for a 
Ph.D. but had not completed his dissertation. Subsequently, an OSC 
official indicated that the Deputy Special Counsel misspoke about Mr. 
Hicks's educational level. 

[25] 5 C.F.R. Part 304. 

[26] GAO-04-36. 

[27] Whistleblower disclosures are federal employees' allegations of 
wrongdoing by other federal employees, such as violations of laws and 
"gross waste" of funds. 

[28] 5 U.S.C. § 1213(h). 

[29] Former federal employees and applicants for federal employment are 
also protected against prohibited personnel practices. See 5 U.S.C. § 
2302(b). 

[30] OSC's Directive No. 1400-36, dated October 12, 2000, addresses the 
agency's administrative grievance process. 

[31] An alliance of public interest organizations also joined the OSC 
employees as complainants. 

[32] Executive Order 12805, "Integrity and Efficiency in Federal 
Programs," 57 Fed. Reg. 20627, May 11, 1992. The chair of the PCIE is 
the Deputy Director for Management of the Office of Management and 
Budget (OMB). Members of the PCIE include all civilian presidentially 
appointed inspectors general, Associate Deputy Director for 
Investigations of the Federal Bureau of Investigation (FBI), Director 
of the Office of Government Ethics (OGE), the Special Counsel, and the 
Deputy Director of OPM. A second council of federal inspectors general, 
the Executive Council on Integrity and Efficiency (ECIE), is composed 
of all civilian statutory inspectors general that are not represented 
on the PCIE. The chair of the PCIE also serves as chair of the ECIE. 

[33] The Integrity Committee of the PCIE is responsible for receiving, 
reviewing, and referring for investigation administrative allegations 
against inspectors general and certain inspector general staff members. 
Executive Order 12993, "Administrative Allegations Against Inspectors 
General," 61 Fed. Reg. 13043, March 21, 1996. 

[34] 5 C.F.R. § 1201.13. 

[35] 5 C.F.R. § 1200.3. 

[36] The EEOC also has enforcement responsibility over federal sector 
employment discrimination prohibitions under the Rehabilitation Act of 
1973, the Equal Pay Act of 1963, and the Age Discrimination in 
Employment Act (ADEA), as amended. 

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