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Watchdog: Follow the Money

Part Four: Federal officials cede power to contractors who write themselves sweetheart deals

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Part four of a five-part Washington Examiner series, "Just Sign Here: Federal Workers Max Out at Taxpayer Expense." See the entire series -- and FMCS workers' salaries -- at this link.

Officials at the Federal Mediation and Conciliation Service effectively ceded control to outside contractors who helped write their own contracts and became angry when asked to compete for work, according to official emails reviewed by the Washington Examiner.

One group of private instructors who had for years been paid about $1,500 each per day to train mediators at an annual conference became irate when a new FMCS employee said they would no longer also be paid $163 per hour for the time they spent traveling.

Federal rules state the government pays for travel expenses, not hourly rates for time spent in transit.

They and others were informed that, as contractors, they were only permitted to speak with the contract officer, Berkina Porter. Yet they repeatedly contacted deputy director Allison Beck, who indicated that adherence to contracting procedures was merely a technicality that could be circumvented.

Just Sign Here

Federal Workers Max Out at Taxpayer Expense

A five-part series by the Washington Examiner watchdog team
Tuesday: Bureaucrats at tiny agency buy legions of luxuries with purchase cards
Wednesday: Reckless FMCS spending goes straight to the top
Thursday: Implicated top officials forced whistleblower to retract complaint on purchase card fraud
Friday: At federal agency, officials cede authority to outsiders who write their own contracts
Monday: FMCS fired wounded warrior whistleblower after ICU stay
Data: FMCS salaries and bonuses
View the whole series

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Do you know more about what's going on at the FMCS -- or any other federal agency? Contact Luke Rosiak at lrosiak@washingtonexaminer.com.

"Apparently, some of the changes were made due to the Federal Acquisition Regulations not permitting certain items in contractor agreements. That doesn't mean that you cannot get paid for certain things; it simply means they come under different headings or are handled in different ways," Beck wrote. She then asked Porter how compensation could be raised in other areas of the contract.

When Porter held firm, would-be contractor Barry Winograd, a California arbitrator, lambasted: "You issued an ultimatum that has been coupled with a warning that work we have successfully performed for the agency for more than a decade — at great personal sacrifice, I should add — will be taken away unless we comply in an unquestioning manner with your edict."

Another contractor, Margaret Brogan, had work steered towards her by an FMCS employee who was so close to her that she was at her wedding.

Brogan became incensed when she learned from that employee, Vella Traynham, that the agency would consider soliciting proposals instead of delivering the work directly to the hand-selected group.

"There are plenty of problems, which would not exist, in my view, if Vella ... was running this course," she wrote of "the facts that I learned from Vella at my wedding celebration this past Saturday."

Brogan also contacted Beck, since she "has asked me to keep her abreast of problems," according to one of the emails.

It turned out that before handing it over to Porter, Beck had worked with the group of incumbent contractors to write a “statement of work,” a primary contracting document — in essence writing their own job description.

"I am also copying Allison Beck since she was involved in finalizing the Statement of Work documentation that was agreed upon," Winograd wrote.

In another email, he wrote, "Here is the SOW, with the suggested insertion in bold face type," providing language that said that the winning bidder should have a demonstrated ability to teach the classes.

It is a fundamental violation of contracting rules to provide the "statement of work" to a contractor before it is given to all candidates, much less to allow him to have a role in creating it, because that would allow one company to tailor the solicitation in a way that situated it to receive the work.

“These folks do not think of themselves as contractors to FMCS — they have been allowed to run these programs for many, many years and do not appreciate being questioned about expenses," an official wrote.

Separately, FMCS agreed to pay a company $350 an hour for labor, and to pay six months before work was even started as a favor to help with its cash flow.

And when Porter ran a bidding process to find trainers to teach five-day classes to FMCS employees and it didn’t result in top officials’ acquaintances getting the contract, chief financial officer Frances L. Leonard and others abruptly cancelled the award and re-did it, vastly inflating the value without explanation--distributing 18 awards of up to $148,000 each instead of the original one for $190,000, procurement records show.

FMCS employees who tried to negotiate with contractors for better rates found themselves berated by top FMCS officials, such as when one who objected to paying $42 per dozen cookies for a Florida soiree of FMCS employees.

"Why are you all charging the federal government $75 per gallon for coffee?" a vigilant employee wrote to the hotel’s representative.

Director of Training Heather Butler took umbrage at the scrutiny. "Why are you writing Anne? ... There is no need to dispute anything with her at this point."

A hint of why such relationships and contracting shortcuts weren’t called into question may lie in this fact: For 10 years, a company selected by a previous director had been in charge of doing an independent audit, with no contract, for $53,000 a year.

The company, Allmond and Co., was so close to FMCS officials that they kept badges and keys to the building year-round.

Monday: FMCS fired wounded warrior whistleblower after ICU stay

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Luke Rosiak

Senior Watchdog Reporter/Data Editor
The Washington Examiner