U.S. Office of Special Counsel: Selected Contracting and Human Capital Issues
Published: 2005-11-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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.  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.  In March 2004,  we reported that OSC had not been consistently processing its cases within  statutory time limits, creating backlogs.  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.  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.
subsections: section_title: Background
paragraphs: 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.
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.
As authorized by OSC’s appropriation, OSC may use 5 U.S.C. § 3109 to hire  intermittent consultants.  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.
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.
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.
section_title: Order for Organizational Assessment Did Not Comply with Rules
paragraphs: 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   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.
subsections: section_title: No Competition Was Sought and Waiver Lacked Credibility
paragraphs: Contracting officers are generally required by the Competition in  Contracting Act 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.  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.
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.  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.
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  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 5-½ 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.  Thus, the justification’s reference to budget  constraints necessitating a sole-source order is not a valid rationale.
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.
section_title: Price Reasonableness Determination Not Documented
paragraphs: 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.
section_title: Unauthorized OSC Officials Performed Duties of Contracting Officer’s Representatives
paragraphs: 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.  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.  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.
section_title: Tasks Specified for OSC-Appointed Intermittent Employee Were Consistent with OPM Criteria
paragraphs: 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.
subsections: section_title: OSC Gave Intermittent Employee Two Significant Tasks and Said Pay Was Based on Qualifications
paragraphs: 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.  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.  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.   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.
section_title: Statement of Work and Duties Actually Performed by Intermittent Employee Were Consistent with OPM Criteria
paragraphs: 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.  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.  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   assisting with and attending the Special Counsel’s testimony before a   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.  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.
section_title: Redress Actions for OSC Employees Are Not Workable in Certain Cases; Other Agencies Have Developed Procedures for Internal Cases
paragraphs: 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.
subsections: section_title: Seeking Redress through OSC Can Be Unworkable for OSC Employees for Allegations Against the Special Counsel or Deputy Special Counsel
paragraphs: Title 5 of the United States Code protects federal employees, including OSC  employees, from prohibited personnel practices.  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.  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.
section_title: Investigation of Allegations Against the Special Counsel Was Sent to the Integrity Committee of the PCIE
paragraphs: 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. 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.  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.   In mid- October, 2005, the chair assigned OPM’s inspector general to conduct the  investigation.
section_title: Other Agencies with Redress Roles Have Addressed Procedures for Complaints Against Them by Their Own Employees
paragraphs: 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).   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.
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. 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.
section_title: Additional Redress Options Could Be Made Available to OSC Employees
paragraphs: 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.
subsections: section_title: Independent Body Could Conduct External Investigation
paragraphs: 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.
section_title: OSC Employees Could Be Given Broader Appeal Rights to MSPB
paragraphs: 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.
section_title: Conclusions
paragraphs: 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.
section_title: Matter for Congressional Consideration
paragraphs: 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.
section_title: Recommendations for Executive Action
paragraphs: 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.
section_title: Agency Comments
paragraphs: 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.
section_title: Comments from the Office of Special Counsel
section_title: Appendix II