Called to Account
Over the past five years, agencies increasingly have left the General Services Administration’s Federal Technology Service holding the bag—a very large bag of money.<@SM>
‘Parking’ money
Most of the money does get used—21 agencies spent $8.7
billion in fiscal 2003—but a large cache of unused funds has built up through
the years.
Especially during the past decade, as buying IT became big
business, GSA officials promoted the ability of agencies to “park” money in
the IT Fund to extend its life beyond the end of the fiscal year, GSA and other
agency procurement officials say. Depending on the strings Congress attaches to
the dollars, agencies typically have to spend their appropriated funds before
Oct. 1—the beginning of the fiscal year.
GSA has since quashed the promoting of and the actual
“parking” or “banking” of money by agencies in FTS’ IT Fund—severely
limiting a well-liked and often-used benefit of FTS.
Part of its appeal was where the fund went awry: Agencies
could park money in the IT Fund when they did not have—and GSA did not enforce
the need for—a well-defined plan on how to use the money.
“There may have been a misinterpretation of how the IT
Fund worked,” said Kathleen Turco, GSA’s chief financial officer, who is
leading the effort to improve how the fund works. “Through the Get It Right
program, we are ensuring the financial policies and procedures are clear as they
need to be for all contracting folks.”
This misinterpretation resulted in money building up over
the years, and now GSA is telling agencies to identify how they plan to use the
money. For instance, agencies could continue to use the funds for an ongoing
contract that cannot be stopped, such as for software development. But other
funds will have to be returned to the Treasury Department because their
authorizations have expired or they are not for ongoing work, Turco said.
“We were not as vigilant with the closeout of contracts
as we should have been,” Turco said, referring to GSA’s obligation to return
unspent money to agencies. “We are making the adjustments and taking unfilled
customer orders off our books so the agencies can de-obligate funding.”
While GSA is moving to clear the backlog of unused funds,
officials also are developing policy letters on how the IT Fund should be used
this year and on when FTS will no longer accept new work, in order to make sure
all the orders get obligated before Oct. 1, said an agency official who
requested anonymity.
“We will not take work from customer agencies that we
cannot execute in a reasonable time frame,” the official said. “How long is
reasonable? I’m not sure. But five years is not reasonable, we all can agree
on that.”
This policy follows a series of other policy announcements
from GSA last summer and fall, detailing how the fund would work this year.
Current and former GSA officials, both on and off the
record, maintain that employees who were promoting the ability to park money in
the fund did not understand the intent of the rules.
But others called some of the employees’ acts borderline
illegal.
“Parking and dumping where an agency has a need for $1
million worth of IT, but puts in the account $3 million or $5 million—that is
illegal,” said Steven Tomanelli, a procurement lawyer who travels the country
consulting and training GSA and other agency civilian acquisition workers.
“The IT Fund is a well-conceived idea, but there [have] been some
violations.”
The question of legality comes into play when agencies ask
FTS contracting employees to spend funds left over from an initial purchase on
new projects.
Reprogram funds
Tomanelli and others say spending extra money goes against
appropriations law and possibly the Anti-Deficiency Act, which basically says
agencies are not to spend money they don’t have.
“Trying to hide dollars from the Hill is what the IT Fund
lends itself to,” said William Shook, a partner with
Preston
, Gates and Ellis LLP, a
Washington
law firm. “Agencies should just ask Congress to reprogram funds.”
Tomanelli and other experts point to FTS’ culture of
courting business from other agencies and its bonus structure, under which GSA
rewards employees with cash bonuses for sales. “There was a large amount of
blind acceptance by GSA buyers,” he said.
One former GSA official who requested anonymity said the
agency is not trying to figure out who was right or wrong, but wants to go
forward with a clear definition of how to use the IT Fund.
“There is a lot of controversy to whether the belief of
parking money was wrong from the beginning, or whether times have just
changed,” the former official said.
Alan Chvotkin, senior vice president and general counsel
for the Professional Services Council, an
Arlington
,
Va.
, trade association, said his members are concerned about possible task orders
that will be cancelled for lack of funds.
But Jeffrey Westerhoff, senior vice president of
governmentwide acquisition contracts for SRA International Inc. of
Fairfax
,
Va.
, and chairman of the GSA subcommittee for the Information Technology
Association of America, an
Arlington
,
Va.
, trade association, said agencies will find money to pay for projects that may
be affected by FTS’ actions.
Meanwhile, agencies also have to be aware of the extra
planning they will have to do.
“We need to do the follow-through and make sure this is
not a recurring issue,” Lee said. “We are asking program managers to answer
some simple questions before sending money over to GSA.”
Reprogram funds