a

GAO

United States Government Accountability Office

Report to Congressional Requesters

November 2005 U.S. OFFICE OF 

SPECIAL COUNSEL

Selected Contracting 

and Human Capital 

Issues

GAO-06-16
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

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 

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Highlights of GAO-06-16, a report to 

congressional requesters 

November 2005

U.S. OFFICE OF SPECIAL COUNSEL

Selected Contracting and Human Capital 

Issues 

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 solesource 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. 

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 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. 
Page i GAO-06-16 Selected Contracting and Human Capital Issues

Contents

Letter 1

Results in Brief 3

Background 5

Order for Organizational Assessment Did Not Comply with Rules 7

Tasks Specified for OSC-Appointed Intermittent Employee Were 

Consistent with OPM Criteria 12

Redress Actions for OSC Employees Are Not Workable in Certain 

Cases; Other Agencies Have Developed Procedures for Internal 

Cases 16

Additional Redress Options Could Be Made Available to OSC 

Employees 20

Conclusions 21

Matter for Congressional Consideration 22

Recommendations for Executive Action 22

Agency Comments 22

Appendixes

Appendix I: Comments from the Office of Special Counsel 26

Appendix II: Comments from the Administrative Resource Center, Bureau 

of the Public Debt, U.S. Department of the Treasury 29
Contents

Page ii GAO-06-16 Selected Contracting and Human Capital Issues

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reproduce this material separately.

Abbreviations

ALJ administrative law judge

ADEA Age Discrimination in Employment Act

ARC Administrative Resource Center 

EEO Equal Employment Opportunity

EEOC Equal Employment Opportunity Commission 

ECIE Executive Council on Integrity and Efficiency

FAR Federal Acquisition Regulation 

FBI Federal Bureau of Investigation

GSA General Services Administration 

MOBIS Management, Organizational and Business Improvement 

Services

MPRI Military Professional Resources, Inc.

MSPB Merit Systems Protection Board 

OEO Office of Equal Opportunity

OGE Office of Government Ethics

OMB Office of Management and Budget

OPM Office of Personnel Management 

OSC Office of Special Counsel 

PCIE President’s Council on Integrity and Efficiency
Page 1 GAO-06-16 Selected Contracting and Human Capital Issues

United States Government Accountability Office

Washington, D.C. 20548

A

November 17, 2005 Letr

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.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.2

 In March 2004, 

we reported that OSC had not been consistently processing its cases within 

statutory time limits, creating backlogs.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. 

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).
Page 2 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.

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.
Page 3 GAO-06-16 Selected Contracting and Human Capital Issues

Results in Brief ARC did not satisfy competition requirements in issuing a $140,000 solesource task order for an organizational assessment, at OSC’s request, to the 

consulting firm Military Professional Resources, Inc. (MPRI).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.

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.
Page 4 GAO-06-16 Selected Contracting and Human Capital Issues

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),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 Senateconfirmed 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 

6

The PCIE is an interagency council, including presidentially appointed inspectors general, 

charged with promoting integrity and efficiency in federal programs.
Page 5 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.8

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).
Page 6 GAO-06-16 Selected Contracting and Human Capital Issues

As authorized by OSC’s appropriation, OSC may use 5 U.S.C. § 3109 to hire 

intermittent consultants.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.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 

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). 

1059 Fed. Reg. 67232, Dec. 29, 1994.
Page 7 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.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.

115 U.S.C. § 1215(b). 

12See 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.
Page 8 GAO-06-16 Selected Contracting and Human Capital Issues

No Competition Was Sought 

and Waiver Lacked 

Credibility 

Contracting officers are generally required by the Competition in 

Contracting Act13 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.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. 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.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.17 

1341 U.S.C. § 253.

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

15Effective July 2004, new procedures in FAR 8.405-6 set forth criteria for documenting 

justification and approval of sole-source Schedule orders.

1641 U.S.C. § 253(c)(1); FAR 6.302-1.

17FAR 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.
Page 9 GAO-06-16 Selected Contracting and Human Capital Issues

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, 
Page 10 GAO-06-16 Selected Contracting and Human Capital Issues

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 5-1⁄2 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. 18 Thus, the justification’s reference to budget 

constraints necessitating a sole-source order is not a valid rationale.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 solesource 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. 

1841 U.S.C. § 253(f)(5); FAR 6.301(c).

19The 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. 
Page 11 GAO-06-16 Selected Contracting and Human Capital Issues

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.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 

20This official retired in September 2004.
Page 12 GAO-06-16 Selected Contracting and Human Capital Issues

order.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. 

21The 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.
Page 13 GAO-06-16 Selected Contracting and Human Capital Issues

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.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-15.23 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.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. 

225 C.F.R. § 304.104.

23Mr. 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.

24Although 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.
Page 14 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.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, 

255 C.F.R. Part 304.

26GAO-04-36.
Page 15 GAO-06-16 Selected Contracting and Human Capital Issues

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.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 

27Whistleblower disclosures are federal employees’ allegations of wrongdoing by other 

federal employees, such as violations of laws and “gross waste” of funds.
Page 16 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.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.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. Fact285 U.S.C. § 1213(h).

29Former federal employees and applicants for federal employment are also protected 

against prohibited personnel practices. See 5 U.S.C. § 2302(b).

30OSC’s Directive No. 1400-36, dated October 12, 2000, addresses the agency’s administrative 

grievance process.
Page 17 GAO-06-16 Selected Contracting and Human Capital Issues

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.
Page 18 GAO-06-16 Selected Contracting and Human Capital Issues

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.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.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.33 In midOctober, 2005, the chair assigned OPM’s inspector general to conduct the 

investigation.

31An alliance of public interest organizations also joined the OSC employees as 

complainants.

32Executive 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.

33The 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.
Page 19 GAO-06-16 Selected Contracting and Human Capital Issues

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).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.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. 36 As 

345 C.F.R. § 1201.13.

355 C.F.R. § 1200.3.

36The 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. 
Page 20 GAO-06-16 Selected Contracting and Human Capital Issues

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.
Page 21 GAO-06-16 Selected Contracting and Human Capital Issues

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.
Page 22 GAO-06-16 Selected Contracting and Human Capital Issues

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 Senateconfirmed 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. 
Page 23 GAO-06-16 Selected Contracting and Human Capital Issues

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 
Page 24 GAO-06-16 Selected Contracting and Human Capital Issues

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.

George H. Stalcup

Director, Strategic Issues
Page 25 GAO-06-16 Selected Contracting and Human Capital 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
Page 26 GAO-06-16 Selected Contracting and Human Capital Issues

Appendix I

Comments from the Office of Special Counsel AAppenednxidexiIs
Appendix I

Comments from the Office of Special Counsel

Page 27 GAO-06-16 Selected Contracting and Human Capital Issues
Appendix I

Comments from the Office of Special Counsel

Page 28 GAO-06-16 Selected Contracting and Human Capital Issues
Page 29 GAO-06-16 Selected Contracting and Human Capital Issues

Appendix II

Comments from the Administrative Resource 

Center, Bureau of the Public Debt, U.S. 

Department of the Treasury ApendxiI

(450400)
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