After Government Screw-Up, Contractor Will Resume Control of Army Child Care Program

A contractor will resume control in February of a program that helps Army families pay for private child care, because the government mismanaged it for a year and failed to reimburse military parents on time.

Child Care Aware of America, which ran the Army Fee Assistance program between 2004 and 2014 before the Army canceled the contract to save money and handed responsibility over to the General Services Administration, will accept all new family and child-care provider applications starting on Feb. 22. The contractor will work with GSA and the Army over the next eight months on shifting responsibility for current cases in several phases, completing the full transition back to Child Care Aware of America by Oct. 28, according to witnesses testifying at a congressional hearing on Wednesday.

The first phase will include transitioning families in the Washington, D.C., metropolitan region who currently participate in the program, which helps eligible service members pay for child care in the private sector when there is no on-base care available. Nearly 13,000 families participate in the Army’s program, growing from 200 families during the past 12 years. Child Care Aware of America runs similar subsidy programs for the Air Force, Marine Corps, and Navy.

GSA botched the management of the Army’s child-care subsidy program, resulting in a backlog by September 2015 of more than 9,000 unpaid childcare invoices, approximately 5,000 unprocessed applications, as well as thousands of unanswered emails and phone messages from concerned military families. After a September congressional hearing on the topic, GSA pledged to pay the backlogged invoices to families within a month, which the agency did.

GSA also has made progress clearing up its application backlog as well as improving communication with the program’s participants, said Carol Fortine Ochoa, GSA’s inspector general, on Wednesday. In September, GSA had a backlog of roughly 26,000 “action items” – which included the unpaid invoices and unprocessed applications; by the end of December, the agency reduced that list to 3,100 items, Ochoa reported to lawmakers on a House Oversight and Government Reform subcommittee.

GSA now is processing invoices “typically” within three days, and applications (new and re-certifications) within 10 days, said Gerard Badorrek, the agency’s chief financial officer.

The agency blamed a lack of staff and inadequate new technology for the screw-up, which ended up costing the government millions more instead of saving money, and caused financial distress for many military families. In some cases, service members and their families were shelling out more than $1,000 per month for child care as part of the subsidy program -- and waiting months for Uncle Sam to reimburse them. Under the current program, child care providers send monthly invoices to GSA for each child, and the agency pays its portion of the bill when it verifies the information it receives from applicants and providers. Families have to pay all child care costs up front while waiting for GSA approval.

Lynette Fraga, CCAoA’s executive director, said the organization currently serves nearly 4,000 military families, processes payments in five days or less and applications in 10 days or less, and pays out roughly $3 million in monthly subsidies. “As you can appreciate, through this experience we have been able to refine our processes, achieve economies of scale, and increase our efficiency,” she told lawmakers. Fraga said CCAoA is hiring more staff and training employees to handle the new contract with the Army.

The Army apologized for poorly managing the initial transition from CCAoA to GSA in 2014, and failing to do its due diligence to ensure GSA could handle the increased workload and administration of the program. “We deeply regret the hardships and inconvenience we caused our families and are doing everything possible to regain their confidence and ensure mission readiness for our families,” said Stephanie Hoehne, director of family and morale, welfare and recreation at the Army Installation Management Command.

Hoehne said that Army families can contact the agency at any time with questions or concerns about the subsidy program, and the agency will work with GSA and CCAoA to respond properly. The Army and CCAoA, are doing outreach to families through social media, webinars and other types of communication to notify them of the changes.

Lawmakers on the subcommittee were cautiously optimistic that the program’s transition back to the contractor would go smoothly, but warned officials to let them know immediately if things go awry.

“As we look at this phased-in approach, let’s be as diligent with that as we have with trying to fix this particular problem,” said Subcommittee on Government Operations Chairman Mark Meadows, R-N.C., pointing out that originally officials expected to have the transition complete by January.

“I’m gonna hold you to your October deadline,” Meadows told Hoehne and Fraga, adding, “I would ask that if you see that that is not going to be met, you let this committee know the minute you see a problem and the reason why it is, so we can go to work in a bipartisan way to make sure that Army families are supported in the manner that they have earned and that they deserve.”