GSA 'grossly mismanaged' TTS, special counsel says

The independent Office of Special Counsel backs whistleblower claims that innovation shops at GSA were poorly managed.

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The office that examines federal agency whistleblower complaints found the General Services Administration "grossly mismanaged its Technology Transformation Service," backing a complaint filed by one of its top acquisition officials.

In a July 6 report to the GSA, the White House and Congress, the Office of Special Counsel said the GSA's response to a whistleblower complaint by GSA Federal Acquisition Service Commissioner Tom Sharpe was unreasonable.

The OSC said that after reviewing the finding of GSA's Office of Inspector General, it helped Sharpe settle with GSA to resolve his whistleblower claim. It provided no details on that settlement.

Sharpe had filed the complaint with the GSA IG over the misuse of the agency's Acquisition Service Fund to fund the TTS in that tech group's early days. Sharpe oversaw the ASF while he was at GSA.

The ASF is a pool for the fees the agency charges other agencies to use its schedule and governmentwide acquisition contracts.

Sharpe and FAS Deputy Commissioner Kevin Youel Page, abruptly left the agency in early June amid a reorganization.

The documents released by OSC shed some light on that reorganization.

Timothy Horne, acting GSA administrator, told OSC in a June 7 letter that he had addressed potential violations of law and policy with a reorganization that put TTS under the control of the FAS and put a political appointee in charge of FAS.

Adam Miles, OSC acting special counsel, told the White House in a letter that GSA still needed to resolve some details over implementation of more management controls that demand more concrete evidence of results.

"TTS has accumulated significant losses, due to the absence of profit-generating products and an excess of highly paid employees. These substantial losses demonstrate that proper financial controls have not been exercised," Miles wrote.

The struggle between  Sharpe and former agency Administrator Denise Turner Roth over how to fund the TTS and its predecessor 18F devolved into political infighting over the course of two years.

The IG investigation concluded Roth had retaliated against Sharpe by threatening to move him elsewhere in GSA as he pushed for more accountability over the funding and controls on TTS. It also said Roth didn't follow through on the transfer threats, but adopted a new governance process for TTS's use of the ASF that sidestepped Sharpe in retaliation for his whistleblowing.

Former GSA Deputy Administrator Adam Neufeld said the case is about a policy dispute, not mismanagement.

"While 18F has certainly had some growing pains, the program is one of the few initiatives supported by both the Trump and the Obama administrations because of its transformative potential," Neufeld said in a statement provided to FCW. "[Sharpe] opposed the idea of 18F from its first suggestion by [former GSA head Dan] Tangherlini years ago. Whether he opposed 18F for substantive reasons or just to 'protect his turf,' he is entitled to his opinion. However, he is not entitled to obstruct decisions that are lawful. He continually took steps to frustrate the initiative, to the point where he was failing to properly oversee his much larger portfolio."

Neufeld said that Sharpe's responsibilities over 18F and TTS were "gradually reassigned over the past four years, all consistent with the law." He added that, "Lawfully reassigning the responsibilities of an employee who is failing to perform his functions effectively and in good faith is what taxpayers deserve."

Roth raised similar points.  "All the steps I took were legal and were made in close consultation with the general counsel and executive leadership of the agency," she said in an email to FCW. "I maintain that all actions I took were appropriate, necessary and driven to modernize the federal government."

Overall, the OSC documents exhibit agreement with Sharpe's complaints of mismanagement. The agency said 18F's cumulative net loss from its launch in FY 2014 through the third quarter of FY 2016 is $31.66 million. OSC also said staffing at the 18F also came at a high premium. It said staff levels increased more than 500 percent after the 18F's inception in 2014, with almost 80 percent of its 201 employees hired at the GS-14 and GS-15 levels. In addition, the OSC said 18F staff members spent over half of their time on non-billable projects.

"We found that 18F's plan to achieve full cost recovery has been unsuccessful because of inaccurate financial projections, increased staffing levels, and the amount of staff time spent on non-billable activities," the OSC said.

Managers have recently revised their projected break-even date for 18F from 2019 to 2020, OSC said.

Note:  Due to an editing error, this article originally attributed remarks from Adam Neufeld to Denise Turner Roth.  It was corrected and republished on July 7.