IG report: Federal personnel officials steered contracts to favored company

April 11, 2013

High-ranking officials at the federal government’s personnel agency steered business to one contractor in violation of procurement and ethics rules, misusing their positions and wasting taxpayer money, an inspector general investigation released Thursday found.

The officials circumvented competitive bidding at the Office of Personnel Management, directing a subcontractor to award at least three contracts to Stewart Liff, a human resources and management consultant, the report said. The government could have obtained the services for much less money through open competition, the report by Inspector General Patrick E. McFarland found.

McFarland’s office issued an interim report on his probe on the day that OPM chief John Berry announced his departure after four years. Berry requested the probe in 2011, and there is no evidence he was aware of the violations, the report said.

Berry told McFarland in a written response that since the investigation began he has installed new leadership in the office that oversees human resources contracts. He said he took “aggressive actions” to address management and operational issues there. He’s reorganized the department and increased oversight over its contracting practices.

And with the report’s release, Berry said he will now increase training for OPM’s contracting staff, among other steps to continue to step up oversight.

“OPM employees are expected to adhere to the highest standards of conduct, particularly when it comes to protecting taxpayer dollars and ensuring that proper contracting protocol is followed,” Berry wrote.

A political appointee who is the highest-ranking employee involved in the wrongdoing has been placed on leave without pay pending the completion of McFarland’s investigation, Berry wrote.

  The report said at least four officials at the agency in charge of contracting and human resources gave Liff preferential treatment by directing the subcontractor, which was already on OPM’s  payroll, to hire him for at least three jobs. They involved training human resources employees, consulting work for a veterans program at the Labor Department and a review of OPM’s financial and personnel staffs and its troubled retirement program.

Liff, who has done work for more than a dozen federal agencies, said in an interview that he “had no personal relationship with anybody at OPM” and purely a “business relationship” with Information Experts Inc., the Reston-based subcontractor.

Liff said that in each instance, “I was under the impression the work was done through a competitive process.”

“This is obviously very painful for me,” Liff said. “I feel I’ve done nothing wrong.”

Information Experts was told it would receive the awards as long as it hired Liff for the projects, the report said. Officials with the company could not be immediately reached for comment.

McFarland wrote that his investigation “has raised serious concerns about the stewardship of taxpayer funds” by OPM.  “Federal contracting procedures designed to promote economy, effectiveness and efficiency were bypassed.”

Liff’s contracts with the Department of Labor came under scrutiny in 2011, and that year forced out a top official appointed by President Obama to oversee a job-training program for veterans.

Raymond Jefferson resigned after an inspector general’s investigation at Labor found he had violated procurement rules and ethics principles. Liff was a former colleague of Jefferson’s, the inspector general said.

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Josh Hicks | April 11, 2013