Merit Systems Protection Board

Financial and Administrative 

Management

Fiscal Year 2020 Service Contract Inventory Analysis

February 2022
2

Background

The Merit Systems Protection Board (MSPB) is an independent, quasi-judicial agency in 

the Executive branch that serves as the guardian of Federal merit systems. The Board was 

established by Reorganization Plan No. 2 of 1978, which was codified by the Civil 

Service Reform Act of 1978 (CSRA), Public Law No. 95-454. The CSRA, which became 

effective January 11, 1979, replaced the Civil Service Commission with three new 

independent agencies: Office of Personnel Management (OPM), which manages the 

Federal work force; Federal Labor Relations Authority (FLRA), which oversees Federal 

labor-management relations; and the Board.

The mission of the MSPB is to protect the Merit System Principles and promote an 

effective Federal workforce free of Prohibited Personnel Practices. MSPB carries out its 

statutory responsibilities and authorities primarily by adjudicating individual employee 

appeals and by conducting merit systems studies. In addition, MSPB reviews the 

significant actions of the Office of Personnel Management (OPM) to assess the degree to 

which those actions may affect merit. 

Introduction

As required by Division C, Section 743 of the Fiscal Year (FY) 2010 Consolidated 

Appropriations Act (P.L. 111-117) and further guidance from the Office of Management 

and Budget (OMB) – Office of Federal Procurement Policy (OFPP) Memorandum to 

Chief Acquisition Officers (CAO) and Senior Procurement Executives (SPE), entitled 

“Service Contract Inventories” - dated November 5, 2010 and December 19, 2011, and 

the FY2021 Service Contract Inventory Instructions for Agencies, the U.S. Merit Systems 

Protection Board (MSPB), Office of Financial and Administrative Management prepared 

an annual inventory of the service contracts and performed an analysis of the data in the 

inventory to determine whether contract labor is used appropriately and effectively and 

the mix of federal employees and contractors in the agency is effectively balanced. The 

results are summarized in this report.

OMB guidance requires that priority consideration be given to reviewing the use of 

professional and management services and information technology support services. 

Based on concerns of risk of losing control of mission and operations, OMB identified 

special interest functions that agencies should give increased management attention. 

Additionally, the recommendations in the GAO report Civilian Service Contract 

Inventories: Opportunities Exist to Improve Agency Reporting and Review Efforts, 

GAO-12-1007, September 2012 must be addressed in the analysis.
3

SPECIAL INTEREST FUNCTIONS

PSC PRODUCT OR SERVICE DESCRIPTION

B505 SPECIAL STUDIES/ANALYSIS- COST BENEFIT

D302 IT AND TELECOM- SYSTEMS DEVELOPMENT

D307 IT AND TELECOM- IT STRATEGY AND ARCHITECTURE

D310 IT AND TELECOM- CYBER SECURITY AND DATA BACKUP

D314 IT AND TELECOM- SYSTEM ACQUISITION SUPPORT

R406 SUPPORT- PROFESSIONAL: POLICY 

REVIEW/DEVELOPMENT

R408 SUPPORT- PROFESSIONAL: PROGRAM 

MANAGEMENT/SUPPORT

R410 SUPPORT- PROFESSIONAL: PROGRAM 

EVALUATION/REVIEW/DEVELOPMENT

R413 SUPPORT- PROFESSIONAL: SPECIFICATIONS 

DEVELOPMENT

R423 SUPPORT- PROFESSIONAL: INTELLIGENCE

R425 SUPPORT- PROFESSIONAL: ENGINEERING/TECHNICAL

R497 SUPPORT- PROFESSIONAL: PERSONAL SERVICES 

CONTRACTS

R707 SUPPORT- MANAGEMENT: 

CONTRACT/PROCUREMENT/ACQUISITION SUPPORT

R499 SUPPORT- PROFESSIONAL: OTHER

R699 SUPPORT- ADMINISTRATIVE: OTHER

R799 SUPPORT- MANAGEMENT: OTHER

MSPB TOP TEN PRODUCT SERVICE CODES

PSC PRODUCT OR SERVICE DESCRIPTION

R606 SUPPORT- ADMINISTRATIVE: COURT REPORTING

D319 IT AND TELECOM- ANNUAL SOFTWARE MAINTENANCE 

SERVICE PLANS

R499 SUPPORT- PROFESSIONAL: OTHER

B550 SPECIAL STUDIES/ANALYSIS- ORGANIZATION/ 

ADMINISTRATIVE/PERSONNEL

D399 IT AND TELECOM- OTHER IT AND 

TELECOMMUNICATIONS

D318 IT AND TELECOM- INTEGRATED HARDWARE/SOFTWARE/ 

SERVICES SOLUTIONS, PREDOMINANTLY SERVICES

X1GZ LEASE/RENTAL OF OTHER WAREHOUSE BUILDINGS

R704 SUPPORT- MANAGEMENT: AUDITING

J074 MAINT/REPAIR/REBUILD OF EQUIPMENT- OFFICE 

MACHINES/TEXT PROCESSING SYS/VISIBLE RECORD 

EQUIPMENT

U009 EDUCATION/TRAINING- GENERAL
4

Scope 

In compliance with the FY 2010 Consolidated Appropriations Act, MSPB completed a 

thorough analysis of its FY 2020 inventory to:

• gauge whether contracts for services are being used appropriately to support the 

MSPB mission;

• determine the effectiveness of MSPB’s use of support contractors; and

• identify future improvements to our service-related acquisition practices.

MSPB is submitting this report, in accordance with OMB’s guidance and the GAO 

Report #GAO-12-1007, to present its analysis, methodologies, significant findings, 

accomplishments, and future actions required for continued improvements.

Analysis of FY 2020 Service Contract Inventories

MSPB continues to strengthen its financial stewardship throughout the acquisition lifecycle. The MSPB Procurement office completed the analysis of their 2020 service 

contract inventory assuring service contracts supported valid program requirements along 

with considering the balance between federal employees and service contractors. 

The MSPB recognizes that the ongoing critical success of the services that the agency 

acquires to support its missions require definitive processes to execute services 

acquisitions and ensure governance and oversight. The ongoing review processes create 

opportunities to engage customers early on in the acquisition planning process which 

enables them to develop effective, results-oriented strategies that meet the need with 

solutions and incentives for efficient innovation throughout the acquisition process. 

The MSPB conducted the inventory analysis, which included a review of the contracts 

and information in the inventory, in accordance with section 743(e) to ensure that:

• any personal service contracts are entered into and being performed in accordance 

with applicable laws and regulation;

• special management attention is given, as set forth in Federal Acquisition 

Regulation (FAR) 37.114, to functions that are closely associated with inherently 

governmental functions;

• contractor employees are not utilized to perform inherently governmental 

functions;
5

• specific safeguards and monitoring systems are in place to ensure that work being 

performed by contractors has not changed or expanded during performance to 

become an inherently governmental function;

• contractor employees are not utilized to perform critical functions that could 

affect the ability of the agency to maintain control of its mission and operations; 

and

• there are sufficient internal agency resources to manage and oversee contracts 

effectively.

MSPB selected four (4) product service codes (PSCs) to include in the analysis of the 

FY2020 Inventory.

PSC Product or Service 

Description

Dollars Obligated in 

FY2020

Rationale for Selecting 

R606 Support - Administrative: 

Court Reporting

$310,274.17 This PSC was selected 

because it is the largest 

area for spending with 

25% of spending for 

service contracts falling 

within this code.

D319 IT and Telecom-Annual 

Software and 

Maintenance Service 

Plans

$162,715.31 This PSC was selected 

because it is the second 

largest spend with 13% 

of spending for service 

contracts falling within 

this code.

R499 Support-Professional: 

Other

$137,919.00 This PSC was selected 

because it is a Special 

Interest Function. It is 

also the third largest 

area for spending with 

11% of spending for 

contracts falling within 

this code.

D304 IT and TelecomTelecommunications and 

Transmissions Services

$31,732.44 This PSC was selected 

because it was one of 

the top 10 from the 

previous year and had 

not been assessed 

previously.
6

Methodology 

The inventory was acquired from a report compiled from the Contract Data available in 

the System for Award Management. The report was created using the parameters 

established in P.L. 111-117.

The contracts included in the analysis were selected based on a review of the statement of 

work, to include contracts most likely to include performance of inherently governmental 

functions, critical functions, or closely associated functions, or otherwise require 

increased levels of management and oversight.

The inventory review methods included:

• interview program managers, budget managers, contracting officer 

representatives, and contracting officers;

• random sampling of service contracts;

• validate inherently governmental – performance by contractor or government;

• assess need driven by mission;

• identify opportunities to reduce duplication; and

• identify challenges and opportunities.

Contracts were assessed to determine if:

• Contractor Personnel perform duties such as: providing legal advice or 

development, interpretations and application of regulations and statues to agency 

employees, determination of budget policy, guidance, and strategy or making 

policy decisions for the Agency;

• Contractor Personnel perform critical functions under this contract;

• Contractor Personnel are involved in such a way that could affect the ability of the 

agency to maintain control of its mission and operations;

• Specific safeguards and monitoring systems are in place for those contracts under 

which critical functions are being performed to ensure these functions do not 

become inherently governmental;

• Contractor Personnel perform the same or similar function(s) as agency staff or 

closely associated functions;
7

• Specific safeguards and monitoring systems in place for those contracts under 

which closely associated functions are being performed to ensure these functions 

do not become inherently governmental;

• Contracts that have been modified to change the scope of work; were the changes 

within scope, and has work changed to become inherently governmental;

• Sufficient resources are available to CORs to effectively manage and administer 

service contracts.

Findings

There was one contract identified as a special interest function obligated by MSPB in 

fiscal year 2020. The service contracts reviewed were selected from the price range of 

$25,000 or above, as required by P.L. 111-117. The MSPB has only six (6) service 

contracts within the service codes assessed that are over the $25,000 threshold. Of those 

contracts, MSPB had four (4) contracts that utilized support contractors. The review of 

selected contracts is as follows:

Of the contracts MSPB reviewed, all were deemed necessary and in direct support of the 

MSPB mission. MSPB Procurement staff did not identify any contracts with inherently 

governmental functions or personal services. MSPB contracts met performance 

expectations and contractual requirements. 

MSPB does not use contractor employees to perform critical functions in such a way that 

could affect the ability of the agency to maintain control of its mission and operations.

Conclusion

In the reviews accomplished, MSPB has determined that contract labor is being used 

appropriately and effectively, contractors are not performing inherently governmental 

functions, safeguards and monitoring systems are in place to ensure that work being 

performed does not become inherently governmental, contractors are not performing 

critical functions that could affect the agency’s ability to maintain control of its mission 

and operations and there are adequate resources to effectively manage contracts.

After reviewing the Services Contract Inventory, MSPB has identified no significant 

weaknesses or challenges to its contracting process. Therefore, no corrective actions 

have been needed and no plans to address future contracts are necessary. Similarly, no 

deficiencies were uncovered in the previous fiscal year inventory. 
8

Responsible Officials

Kevin Nash, Director, Financial and Administrative Management - is accountable for the 

development of agency policies, procedures, and training associated with OFPP Policy 

Letter 11-01 addressing the performance of inherently governmental and critical 

functions. Mr. Nash is also responsible for ensuring appropriate internal management 

attention is given to the development and analysis of service contract inventories. 

FY 2021 Planned Analysis 

In accordance with the Service Contract Inventory Checklist of Submissions, the U.S. 

Merit Systems Protection Board is submitting the identified Planned Analysis for FY 

2021.

The functions are:

• B550 Special Studies/Analysis- Organization/Administrative/Personnel

• DJ10 IT and Telecom - Security and Compliance as a Service

• R418 Support - Professional: Legal

These are the codes that are of highest interest for the agency to analyze for FY 2021.