Government Accountability Office and the Armys Guard Program - Case Study Example

CONTRACT GAO- 06-284 IN FOCUS Following the September 11, 2001 terrorists attacks, a large number of active duty and reserve personnel were delegated abroad to support the war on terror. This scenario, however, had created a significant shortage on the number of military personnel who were assigned to protect domestic military installations. Responding to the urgency of the situation, the Congress allowed the Department of Defense to acquire the services of contract security guards to fulfill functions previously performed by military personnel and thus filling in the deficiency of security personnel in domestic Army installations. Stemming from such an honorable and imperative circumstance, the Army’s Guard Program is perceived as the most viable solution for such a serious condition. However, the Program has generated some concerns which basically question the reliability of the process with which the entire program is being implemented. And it is these concerns that serve as the primordial impetus for Government Accountability Office (GAO) to study, assess and come up with the report - GAO -06- 284 Contract Security Guards: Army’s Guard Program Requires Greater Oversight and Reassessment of Acquisition Approach - regarding their findings pertinent to the implementation of the Army’s Guard Program. GAO-06-284 has found out that “46 out of the 57 installations have guards obtained under the 8(a) sole source contract” (p 3, 10) while the remaining 11 installations have been acquired through competed contracts. Under the US Small Business (SBA) policy and regulation, the SBA’s 8 (a) Business Development Program give a special advantage to 8 (a) Alaska Native corporation (ANC) firms following a mandate from the Congress. This finding becomes more significant as two of the four contractors providing security guards are from 8(a) ANC and that they have been awarded with contracts “totaling to almost $495 million” (p 9) which is the bulk of its contract guards. This move of the Army is questioned on two grounds: First, why opt for sole-source contract when in fact General Services Administration (GSA) is faster and less costly than the former? And second, there is an anomalous finding in the selection. GAO has found out that the “Army has hired an inexperienced contractor” (p 9). This put to the fore the inquiry why not go for an open and full competition in the selection of contractors rather than be limited with just the 8(a)sole source contract. It is known fact that a full and open competition creates a competitive environment that affords the possibility for – lower prices, better services, and more options for picking the right, more experienced service, in this case, protection provider. Moreover, it is a known fact that “invisible forces of competition will bring about lower prices and greater choices” (Palmer & Hartley 2002 p 203) Thus, benefitting the public. It must be remembered that the Army forms part of the public sector and that the Army’s selection should be and is guided by the principles of “respect, freedom, fairness, nondiscrimination, transparency, accountability and openness” (Schultz 2004 p 285) as presented in the Constitution and the Bill of Rights. Furthermore, the issue of the failure of the Army to utilize full and open competition is further aggravated by the fact that there is no sufficient data that will determine the veracity of the Army’s “belief“ that awarding the contract to 8(a)s ANC is easier and faster compared with applying the GSA Schedule approach. In fact, their belief is countered by the claim, “according to the Air Force contracting officer, using GSA Schedule contracts was considered the more efficient, faster method to obtain the guards.” (GAO-06-284 p 13) Being such, it is now proper to ask why the noncompliance with the Federal Acquisition Regulation (FAR)? THE NON-COMPLIANCE ISSUE The Army has raised several factors that contributed to their noncompliance with FAR. They claim that: first, the Army Contracting Agency (ACA) believed that GSA method requires significant amount of time to transact. Second, ACA claims that under GSA Schedule the responsibility for the acquisition of contract guards will devolve to each individual installation and will dilute the Army’s purchasing power. And finally, the third reason for their non-compliance is GSA would not have “allowed a consolidated approach at the national level” (GAO-06-284 p 13) But are these reasons tenable? These reasons do not provide strong arguments for the Army’s non-compliance with FAR. Primarily because: 1. as stated above there is no sufficient data that will determine the veracity of the Army’s negative belief towards GSA Schedule. 2. Existing data and opinion from the US Air Force and the Department of Homeland Security’s Federal Protective Services who utilized GSA Schedule contracts, in fact, argue against the Army’s belief. 3. Full and open competition is a strong driver for cost efficiency and quality assurance of the service or protection required. Lastly, 4. A wider and greater choice option is created under GSA Schedule. Being such, certain actions can be employed by the Department in the future to avoid the same mistakes. And these are: 1. Conduct a comparative study of existing data and opinion regarding GSA Schedule and other approaches. 2. Apply open and full competition in the selection process. 3. Constantly bear in mind that it is the people’s taxes that are used in government contracts like this so necessary diligence, caution and prudence should be exercised and 4. The Army should continuously take a re-assessment of their policies and regulations regarding the Program in order to avoid similar lapses in the future. Recognizing in the selection process alone, what other findings have been found by GAO? GAO’S FINDINGS Aside from discovering that the bulk of its contract guards amounting to $ 495 million have been given to two 8(a) sole source contractor, GAO has also found out that: Screening process of prospective contract guards has significant weaknesses. By relying heavily on the local contractor to perform the initial screening, “the army’s employment screening process have resulted in the hiring of unscreened security guards, some with criminal histories, at US Army Installations” (p3),and opened up other similar risky situations By putting at the hands of the contractor nearly all the training of the prospective security guards, doubts have been raised regarding the adequacy of training, the standard followed for the training, the documentation of the training, and the ability of the military to oversee the training of the security guards. GAO has also found out that training techniques and tasks vary from one contractor to the other, resulting into a de-standardized training techniques and tasks. As cited in GAO, “a subcontractor using its own, detailed weapons re-qualification policy that the prime contractor has not endorsed and does not follow” (p 23) And their most controversial find is the awarding of award-fee plan rewards. The award-fee plan rewards is intended to spell out the criteria with which to evaluate the contractor’s performance and “and the final ratings dictate how much money is to be paid in award fees” (GAO-06-284 p 24) GAO’s RECOMMENDATIONS GAO has provided recommendations that will address the lapses that they have uncovered in their assessment of the Army’s Security Program. Their recommendations are: 1. For the Secretary of Defense to direct the Secretary of Army to reassess the its acquisition strategy and to employ open, full and competitive procedure for future contracts 2. The removal of award-fee plan rewards in future contracts. 3. To design and implement a standardized and centralized training techniques, and tasks 4. To direct installations to used databases (ACRC and NCIC) to act as a supplement for the initial screening of prospective security guards until the standards are properly in place. GAO’S FINDINGS/RECOMMENDATIONS: UNDER REFLECTION I fully agree with the findings and recommendations of GAO. I based my concurrence on the following claims: 1. By using full, open and competitive procedure for future contracts the Army is assured of a wider and greater choice for the services that they require. 2. As stated before, a full and open competitive procedure will more experience security service providers to be considered. Thus avoiding the mistake of hiring a contractor which had experience in manufacturing goods but no experience in providing services. 3. The removal of the ‘award-fee plan rewards’ in future contracts is highly commendable. This I claim on the premise that the concept of reward is supposed to motivate for a better performance. However, under the contract, contractors are merely required to meet ‘contractual requirements’ and that the award-fee plan reward is not designed to elicit above and beyond performance. This entire way of interpreting this part of the contract is dubious, since, “the first rule of contract interpretation is to discover the plain meaning of clear and unambiguous words used in the contract.” (Keynes p 119) The award-fee plan reward is aimed to be the criteria with which to evaluate the contractor’s performance. There is no problem with this. It is a criterion. However, it becomes problematic the moment that contractors are not required to better the performance of their functions, since the award does not necessitate it. In fact, “the Army’s practice of routinely paying its contractors nearly the entire available award fee…regardless of their performance outcomes.” (GAO-06-284 p 26) The question comes to mind is ‘Is there an ambiguity in the coining of the term award-fee plan rewards? It is deemed that there is none since the primary purpose of the award is to motivate the contractors in the performance of their function. And common sense tells that performance of function in the contract does not merely connote ‘meeting contractual requirements’ but that it entails ‘above and beyond performance’. Moreover, the award fee is questionable since there is no clear cut standard with which those who monitor the performance of the contractors may judge and evaluate the actual contractor’s performance. Furthermore, it should be noted that this award-fee plan is translatable in cash – cash which is over and above the profit of the contractors. As such, it seems highly irregular that the award fee does not connote “above and beyond performance”. 4. Lack of efficient initial screening is a source of big concern because the Army which tasks to protect and serve the people employs people with criminal histories. And this scenario is frightening. 5. The lack of standardized training for the security guards defeats the purpose with which the Congress enacted the creation of contract of security guards – which is to protect domestic installations. But how can this be achieved when there is distrust to the ability of the installed guards themselves. 6. And finally, the tax payers’ money should best serve the tax payers themselves. Clearly, the millions of dollars spend in employing army security guards whose training, screening, skills and capacity in the performance of their function is questionable redounds to a waste of taxpayers’ money.(Gilmore & Jensen 1998; Schultz 2004) PROBLEMS OF IMPLEMENTATION The possible problems in the implementation of GAO’s recommendations are: 1. finding the balance between principle underlying ANC and the principle behind the creation of contract security guards. 2 Another possible concern is time. The implementation of the recommendations requires ample time. However, considering the ‘situation’, there seems to be little time for a proper and judicious implementation of the recommendations.3 Where to get the additional source of funding which is necessary to put into operation the changes in the screening process and the coming up with the standards for training. And 4, Will there enough manpower who will be continuously assessing and monitoring the changes in the program? CONCLUSION GAO-06-284 has clearly presented the lapses and loopholes in the Army’s Security program which range from the selection process up to the employment of prospective security guards. The findings and recommendations of GAO should act as a beacon on how future contracts of the Army ought to be. REFERENCES: GAO Report to Congressional Requesters: Contract security guards: Army’s Guard Program requires greater oversight and reassessment of acquisition approach. http:/www.gao.gov Accessed on 19 August 2009. Gilmore, R.S., & Jensen, L. S. (1998) “Reinventing government accountability: Public functions, privatization and the meaning of “state action”, Public Administration Review, Vol. 58, No 3, pp 247 – 259. Keyes, (the details of the book are not in the file that you uploaded) Palmer A. & Hartley, B. (2002). The Business Environment. London: The McGraw-Hill Companies. Schultz, D. (2004). “Professional ethics in postmodern society”, Public Integrity, Vol. 6, No 4, pp 279 -297. Read More