OIG uncovers alleged massive unauthorized use of personal services contracts by IBB officials

BBG Watch Commentary

Law and RegulationsSources told BBG Watch that the Department of State Office of Inspector General (OIG) has found that International Broadcasting Bureau (IBB) officials at the Broadcasting Board of Governors (BBG) federal agency have entered into hundreds of personal services contracts without statutory authority and repeatedly violated the Anti-Deficiency Act.

Sources say that the practice of unauthorized use of personal services contracts, which are characterized by the employer/employee relationship they create between the Government and contractor personnel, has been regularly employed on a massive scale for many years with the full knowledge, approval and encouragement from some of the senior IBB officials. Sources also told BBG Watch that various IBB officials had been warned multiple times by individuals and groups, including employee unions, that what they were doing was in clear violation of the law. These warnings have been ignored, sources told BBG Watch, and the practice of using personal services contracts kept expanding.

BBG has statutory authority to use only 60 personal services contracts, but IBB officials have exceeded this limit by hundreds of contracts, the OIG reportedly found during an audit it conducted last year. The Anti-Deficiency Act specifically prohibits use of personal services contracts beyond the limit authorized by law.

Hundreds of contract employees work full-time under IBB contracts, especially at the Voice of America, at low-pay and without any significant benefits or legal protections available to regular government employees. IBB officials have in fact promoted the creation of two classes of employees. Contract employees are hired and dismissed without any significant oversight. Many of IBB’s contract employees have been in this position for many years, in some cases as long as 20 years. About one third of all VOA employees are now in the category of exploited and badly treated contractors. IBB officials have been promoting and expanding use of full-time contract employees and personal services contracts for years.

“An employer/employee relationship under a service contract occurs when, as a result of the contract’s terms or the manner of its administration, contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee,” ACQuipedia, a collaborative project to create content around Defense Acquisition related topics, explains. “Depending on how a contract is administered and how contract personnel are used, the Government/contractor relationship may evolve into an unlawful personal services relationship,” ACQuipedia readers, many of them government officials and contracting officers, are warned.

The website offers this additional advice to government officials to determine whether they are in compliance with the Federal Government contracting law.

FAR 37.104(d) provides the following questions for determining whether a personal services relationship may exist:

  • Is performance on site? (i.e., on a Government installation)
  • Are the principal tools and equipment furnished by the Government?
  • Are the services being performed by the contractor directly related to the accomplishment of the agency’s assigned mission or function?
  • Are comparable services being performed in the same agency by civil service personnel?
  • Will the need for this type service be expected to last beyond one year?
  • Does the nature of the service being provided reasonably require Government direction or supervision of contractor employees in order to adequately protect the Government’s interest, retain control of the function involved, or retain personal responsibility for the function by a duly authorized Federal officer or employee?

For hundreds of IBB’s contract employees, the answers to all of these questions are in the affirmative, and top IBB officials have known this for years, sources told BBG Watch

Our sources also tell us that to correct this problem, IBB would have to spend between $12 and $18 million — money that has not been appropriated.  Sources also point out that long-time contract employees may have legal claims against the agency, which for years failed to withdraw and pay employment taxes on their behalf. This problem has been noticed already by the IRS, sources told us, and IBB officials were told to start making these tax deductions and payments.

American Federation of Government Employees, AFGE Local 1812, a union representing BBG’s federal employees, has accused top IBB officials of operating above the law in recent years, not just on the personal services contracts issue, but also in other key areas of employee-management relations.

Sources told BBG Watch that in September 2013 the OIG told IBB Director Richard Lobo to immediately cease the use of personal services contracts that violate the Anti-Deficiency Act and to take measures to correct various other massive violations of Federal regulations. Lobo retired about two months after receiving this warning. BBG members, most of them new, re-assigned Lobo’s deputy, Jeff Trimble, who had been in charge of IBB’s administration for several years, to a journalistic position. The BBG board, now led by new chairman, Jeff Shell, put a new three-person interim management team in charge of IBB. The new team took over at the beginning of January 2014.

But the problem of unauthorized contracts created by the former IBB management has not yet been resolved and may cost the agency millions of dollars that BBG does not have, sources told BBG Watch.

In an ironic twist, a different OIG team had sided earlier with IBB officials against BBG member (now former) former U.S. Ambassador Victor Ashe, whom they accused of being too aggressive in asking questions about unauthorized spending, exposing other abuses and condemning poor employee morale and mistreatment of contractors at the agency. The first OIG team failed to uncover any major irregularities at IBB. It took a different team of OIG inspectors to find unauthorized practices Ashe kept warning about while he was still a BBG board member.

“After years of neglect from prior management, Broadcasting Board of Governors is now moving to remedy the mistreatment from a pay standpoint for 35% of BBG’s employees who are on contract as opposed to being fulltime federal employees,” former BBG member Victor Ashe said.

Whatever is done to correct this problem, BBG members should not allow senior IBB officials to try to shift the blame to lower-level managers, contracting officers, other rank and file employees, or former IBB employees. This problem has been created and condoned by senior IBB officials as well as Voice of America  executives.

BBG members must also not allow IBB officials to try to shift the cost of correcting this problem onto agency’s contract employees and federal employees. Contract employees have been exploited for years and should not be victimized any further. The agency’s federal employees have also suffered enough under the IBB management, one of the worst in the entire federal government according to the Office of Personnel Management (OPM) Federal Employee Viewpoint Survey. These employees also deserve better, decent treatment and hope that the renewed BBG board under Chairman Shell will follow in the footsteps of Victor Ashe and treat all employees as the agency’s most valuable asset.

Disclaimer: This commentary expresses general opinions based on various sources. BBG Watch does not provide legal analysis or legal advice. Such analysis and advice should be sought only from qualified legal professionals.

 

 

 

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