No Protection

Federal employees don't ordinarily enjoy defending their jobs against contractors. But it beats losing their jobs without getting a chance to compete.

Early last May, Vallie Bray, head of American Federation of Government Employees Local 3147, learned that Phyllis Johnson, director of the Beltsville, Md., Agricultural Research Center, told 18 guards, seven of whom belonged to the union, to look for new jobs. A private company, Johnson said, would take over security at the 7,000-acre facility in a move called a "direct conversion."

For the next few weeks, the guards endured derisive remarks, such as, "Hey, Wal-Mart's hiring," says one former guard who has since left the scientific facility and who asked to remain anonymous. Then they seemingly got a break. The Office of Management and Budget published a revised version of Circular A-76, the rules on competitive sourcing. The updated guidelines prohibited direct conversions, with a few exceptions. Agriculture complied by letting the security guards enter a "streamlined" competition-an abbreviated version of the standard contests required when more than 65 jobs are at stake.

The guards ultimately lost that competition. And it wasn't until Bray, with other union officials and former OMB procurement chief Angela Styles, analyzed the loss that she spotted several procedural mistakes. But there was little she could do.

The Beltsville situation, while affecting only a handful of federal employees, illustrates a weakness in the streamlined competition process. OMB relies on agencies to understand and follow the rules. If something goes wrong, then those affected, whether federal employees or prospective contractors, have little chance to remedy the problems and no right to file appeals at the agency or the General Accounting Office.

The Beltsville case is an anomaly. Federal employees win most streamlined contests. In fiscal 2003, in-house workers held onto 99 percent of jobs in streamlined contests at the Defense Department and five civilian agencies, GAO research shows.

Those figures do not reflect the results of many competitions using the revised rules. But Stan Soloway, president of the Professional Services Council, an Arlington, Va.-based contractors association, says they hint that agencies are misusing abbreviated procedures. "There is no supervision of this process," he says. OMB officials cannot possibly "oversee each and every [competition]," Styles acknowledges. "They really do have to depend on the good will of the agency people."

A review of documents from the Beltsville contest convinced Styles that officials there didn't fully understand the streamlined competition process. "From my perspective, somebody didn't read the circular," she says.

Paperwork Problems

Beltsville officials projected they could save roughly $1.2 million over five years by hiring contractors to fill 24 security positions, and in November 2003, decided to outsource the work. They later hired Metropolitan Protective Services Inc., a Landover Hills, Md., contractor listed on the General Services Administration's Federal Supply Schedule, to fill the slots.

In documenting the November outsourcing decision, research center officials filled out the wrong cost comparison paperwork, used incorrect terminology and didn't include the proper signatures vouching for the accuracy of cost estimates, Styles says. They used an obsolete streamlined competition form, rather than the one required by the May 2003 circular.

The circular also asks agencies to allow "incumbent service providers" to review the streamlined competition form before publicly announcing a decision. But a security guard designated to represent his colleagues during the competition says he lacked access to cost estimate documents. Bray obtained a copy of the forms after the competition ended through a Freedom of Information Act request. Had the security workers seen the paperwork in time, they would have expressed concerns, she says.

Officials listed 24 guards in the estimate, a figure overstating the necessary staffing level, Bray says. Beltsville typically used fewer than 20 guards, she says.

Regardless of actual staffing levels, research center officials are authorized to employ 23 guards and one administrative assistant, says Sandy Hays, a spokeswoman. "I think it would look rather strange if we didn't include 24 positions" in the in-house cost estimate, she says.

Agency officials are cooperating with an audit of the contest, requested by Sens. Barbara Mikulski, D-Md., and Paul Sarbanes, D-Md., Hays says. "We're confident that we did the competition correctly." The lawmakers asked Agriculture Inspector General Phyllis Fong to focus on the agency's calculations of in-house costs.

Last-Ditch Effort

Even if the audit reveals errors, Metropolitan Protective Service took over at Beltsville on April 4. "If you terminate the new contractor, you will owe [the company] some money," Styles says.

Of 14 guards left at the time, one is without a job. Four retired, one with full benefits. Three joined Metropolitan, and six accepted other positions at Beltsville. Two of those are farm labor jobs and part of an ongoing standard job competition.

Metropolitan is in an awkward position because of the controversy surrounding the contest, says Derrick Parks, the company's president. The three former federal guards on Metropolitan's payroll have been "very receptive" to the changes, he says: "It's an unfortunate situation . . . We appreciate them being so gracious."

Styles says that if she could rewrite the rules for streamlined competitions now, she would make agencies post cost comparison forms publicly. This, she argues, would help highlight mistakes earlier. Soloway says he would welcome more transparency. He's had a hard time tracking down cost comparison documents. "If [agencies] make a decision to keep work in-house, what we're seeing is three and four words of explanation," he says.

Styles says the Agriculture case doesn't necessarily mean that federal employees or contractors involved in streamlined contests should get appeal rights. When agencies follow the rules, there is no need for appeals, she says. "I hope this is just an isolated incident," she adds.

But Styles acknowledges that when errors occur, administration officials have no statutory power to enforce the A-76. OMB can only go back and tell agencies there's a problem.