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AUDIT MEMORANDUM - Contract for temporary clerical services (PI03-25)

August 21, 2003

To: Ken Fogash
Jayne Seidman
Giovanni Prezioso

From: Walter Stachnik

Re: Contract for temporary clerical services (PI03-25)

We recently received allegations about a contract for temporary clerical services (Contract No. 02-D-0353) in the Office of Filings and Information Services (OFIS). The contract was issued to a non-profit company under the National Industries for the Blind/National Industries for the Severely Disabled (NIB/NISH) program.

The allegations were that the contract cost significantly more ($100,000) than the prior contract under a General Services Administration (GSA) schedule. It was further alleged that the Procurement and Contracting Branch in the Office of Administrative and Personnel Management (OAPM) required the award to NIB/NISH, citing legal requirements that did not apply in this case.

We discussed this contract with contracting staff in OAPM and OFIS, and reviewed relevant documentation. OAPM indicated that OFIS's requirement was for clerical support on a long-term basis. OAPM stated that use of a temporary services firm did not meet the requirements in 5 CFR § 300.503, since temporary services employees may only be hired for brief or intermittent use (initially 120 workdays, with a maximum limit of 240 workdays).

OAPM indicated that the requirement could be competed on a non-temporary basis with a set period of performance, but that the GSA temporary services schedule contract could not be used. OAPM indicated that it doubted whether competing this requirement on a non-temporary basis would save much money. It recommended use of a firm under the NIB/NISH program.

OFIS staff confirmed that this contract was significantly more expensive than the prior GSA schedule contract (approximately $200,000 versus $100,000). Because of the price differential, OFIS would prefer to use a contractor from a GSA schedule rather than using NIB/NISH, if such use is allowed.

OFIS stated that GSA indicated that the Commission could legally use its schedule to meet its needs. In addition, OFIS indicated that the NIB/NISH itself indicated that the Commission was not required to use an NIB/NISH firm.

This issue (i.e., whether OFIS can use a GSA schedule contract to meet its temporary clerical needs) concerns a matter of contract law that the Office of General Counsel should resolve.

Recommendation A

In consultation with OAPM and OFIS, the Office of General Counsel should prepare a legal opinion on the issue discussed above, and provide it to those offices.

cc: Jim McConnell
Darlene Pryor
Kim Davis
Greg Jones
George Brown
Peter Derby