Service Contract Inventory FY 2011 Agency Inventory Analysis

1.0 Overview

On November 5, 2010, the Office of Management and Budget (OMB) issued a Memorandum, "Service Contract Inventories", to assist agencies in understanding how contracted services are used in support of mission and operations and to ensure the appropriate utilization of contractors' skills for a balanced workforce. The Equal Employment Opportunity Commission (EEOC) Service Contract Inventory analysis is developed as a part of the Review and Planning Requirements under Section 743 of Division C of the FY 2010 Consolidated Appropriations Act, P.L. 111-117.

As required in the above OMB Memorandum, EEOC prepared an annual inventory of FY 2011 service contracts and analyzed how contracted resources are distributed by function and location across the Commission and within its components. In accordance with section 743(e)(2) of P.L. 111-117, EEOC conducted the required analysis of contracts and information in the inventory to determine if contract labor is being used in an appropriate and effective manner and if the mix of federal employees and contractors in the agency is effectively balanced. The analysis covered the following elements under section 743(e)(2) and Appendix D of the OMB Memorandum dated November 5, 2010, ensuring that--

(i) each contract in the inventory that is a personal services contract has been entered into, and is being performed, in accordance with applicable laws and regulations;

(ii) the agency is giving special management attention, as set forth in FAR 37.114, to functions that are closely associated with inherently governmental functions;

(iii) the agency is not using contractor employees to perform inherently governmental functions;

(iv) the agency has specific safeguards and monitoring systems in place to ensure that work being performed by contractors has not changed or expanded during performance to become an inherently governmental function;

(v) the agency is not using contractor employees to perform critical functions in such a way that could affect the ability of the agency to maintain control of its mission and operations; and,

(vi) there are sufficient internal agency resources to manage and oversee contracts effectively.

2.0 Analysis of FY 2011 Inventory

Based on our review, we have determined that EEOC's contract oversight and management are compliant with federal and agency level statutes and regulations. The Acquisition Services Division (ASD) gathered information from the Program Office Manager and Contracting Officer's Representatives (COR) on the contract vehicle for the critical function under Programming Services. A summary of the findings of our analysis and the steps we have identified that will strengthen our internal controls over the quality of this data follows.

Table 2-1: Special Interest Function Codes for Analysis

2.1 Personal Services Contracts (Special Interest Function Code R497). There are no personal services contracts in EEOC's FY 2011 Service Contract Inventory.

2.2 Analysis of Special Interest Function Code D308 - Programming Services. EEOC reviewed a contract which was awarded under Section 8(a) of the Small Business Act (15 U.S.C. 637(a) for programming services for EEOC's Office of Information Technology (OIT). The work performed under this function included the following services: software development and maintenance support; quality assurance and testing support; end user documentation support; and, ad hoc reports development support.

Special management attention for functions that are closely associated with inherently governmental functions. Prior to June 2011, EEOC hired four new senior project manager positions (PMs) and formalized a Project Management Group which reports directly to the Office of the CIO. One of the functions of this group is to serve as CORs for major IT service contracts. All of these individuals possess strong project management and COR skills and have received the appropriate COR training. As a part of this function, they are responsible for improving EEOC's processes related to contract management and oversight. To further define appropriate government/contractor interaction, OIT issued a "Guide for the Government - Contractor Relationship" in early FY 2011 and provided staff with training on these guidelines during OIT's first quarterly "all hands" meeting. In addition, OIT has focused priority attention on increasing staff knowledge and skills in the area of IT Service Management, to utilize best practices and standardize/streamline OIT internal processes.

The EEOC Contracting Officer also reviews the status of the COR's certification when processing initial awards and modifications to ensure that the COR has met continuous learning and training requirements. A signature line for the Supervisor has also been added to the COR appointment letter.

2.2.1 Prevention of contractor employees performing inherently governmental functions. As mentioned above, OIT trained all staff on appropriate contractor/Government employee relations to ensure that inherently governmental functions are not performed by contractors. OIT updated guidelines to include the FAIR Act definition of what is considered an "inherently government function" in November 2011. Previously, OIT restructured their contract management processes to document workflow and task assignments between FTEs and contractors, to ensure that no contractors are in any way overseeing staff activities or making any decision on behalf of the Government.

2.2.2 Safeguards and monitoring systems in place to ensure that work being performed by contractors has not changed or expanded during performance to become an inherently governmental function. OIT has restructured their contract management processes to ensure that all work assigned to contractors is documented in either a task order (project work) which is reviewed and approved by the COR or remedy ticket (operational work). Contractors are not allowed to accept assignments that are not provided to them through the proper channels. Contractors are also not allowed to create or delegate assignments to FTE, or in any way oversee FTE work. OIT staff and managers have also been advised in various management and staff meetings of the requirement to follow the new formal processes. Tasks under code D308 were assigned in working meetings and integrated working project plans.

2.2.3 Critical Function Performance and Agency Control of Mission and Operations. OIT ensures that staff and managers maintain control over all critical functions to ensure continuity and support for EEOC's mission and operations. Nine (9) contract employees were performing work under function code D308 total (not all full time), but by the expiration date of the contract in September 2012 only one (1) contract employee was providing services.

2.2.4 Agency Resources for Management and Oversight of Contracts. OIT has made major changes in the past year related to contract management and oversight. OIT hired new Project Management Professionals (PMPs) with demonstrated COR experience who oversee and manage OIT's major IT service contracts. As of January 1, 2012, EEOC COR's are certified under the Federal Acquisition Certification for Contracting Officer's Representatives (FAC-COR). OIT has developed new processes and procedures related to contract management and task assignment, ensuring that all decisions and tasking for contractors go through the COR and that all contractor task assignments are documented. OIT has provided training to all employees on appropriate contractor/government employee relationships and are augmenting these guidelines to better define "inherently governmental" functions. OIT has also instituted contract reference libraries in OIT's Document Management System to maintain contract management information, assignments, status reports and deliverables in a restricted formal library structure. The PM Group CORs also mentor more junior level CORs to transfer skills and knowledge on proper contract management. OIT will continue to update and augment these policies and periodically train staff on their implementation and practice.

3.0 Identification of Poorly Performed Contracts. EEOC had no poorly performed contracts in FY 2011.

4.0 Contracts Considered for Conversion

4.1 Convert to Performance by Federal Employees. No contracts were identified for conversion to performance by Federal employees.

4.2 Convert to Alternative Acquisition Approach. No contracts were identified for conversion using an alternative acquisition approach.