United States Marshals Service's Use of Independent Contractors as Guards
Audit Report 05-24
May 2005
Office of the Inspector General
Our audit of the USMS's use of independent contractors for guard services revealed fundamental flaws in the procurement practices of USMS districts. In our review of 223 individual contracts for guard services, we encountered material deviations from USMS policy directives and the Federal Acquisitions Regulation (FAR) governing personal services contracts, including the lack of competitive bidding, arbitrary wage determination, unauthorized contract payments, and the exceeding of procurement authority.8 We attributed the problems encountered, in large part, to districts' general disregard for USMS policy directives concerning the procurement process. This disregard for procurement directives is caused in many instances by the fact that adherence may not be administratively practicable. Nevertheless, the districts' lack of a formal procurement process has created an environment that is conducive to the proliferation of inconsistencies, inefficiencies, and unauthorized uses of independent contractor guards. Lack of Competitive Bidding Process The FAR, Subpart 6.101 (a) states, "with certain limited exceptions, that contracting officers shall promote and provide for full and open competition in soliciting offers and awarding government contracts." Pursuant to the FAR requirement for full and open competition, USMS policy directive: Section 9.31 - Use of Personal Services Contract Guards, Part 8 - Procurement states "Personal services contracts will be procured in accordance with the FAR…. district offices should establish a list of bidders who are cleared to perform services for the government… The purpose of the list is to assist the district in meeting the FAR requirement that the government seek competition when it awards contracts. Thus when the USMS has a requirement for a guard to provide services, it should solicit offers from three of the individuals on the list and award the contract to the guard offering the lowest price." We found that the sites we reviewed failed to provide for full and open competition in the awarding of personal services contracts to independent contractors. The USMS sites reviewed did not maintain bidders' lists, as required by USMS policy. Further, there was no formal solicitation of sealed bids from potential contractors, nor was there any other systematic approach to procure contract guards based on the competitive process. While the JPATS operation advertised for guard positions in local and national publications, we found that guard contracts are usually obtained through personal networking, rather than open competition. Of the 57 independent contractors that we interviewed or provided with questionnaires at the 7 sites we reviewed, 42 contractors (74 percent) indicated that they learned about the guard position through informal contacts with colleagues or acquaintances in law enforcement. At least four others were actively recruited by the USMS. Further, in our survey of the 94 U.S. Marshals, none of the 63 respondents indicated the use of a bidders list or any formal solicitation of independent contractors for guard services pursuant to a full and open competitive bidding process. Instead, we found that the process more closely resembles the recruitment of employees than the procurement of contract services. Further, the procurement practices we observed, rather than providing a forum for full and open competition, instead restricted the pool of applicants to those individuals, who, through some personal contact, sometimes with other independent contractors, sometimes with USMS employees, learn of contract guard positions. USMS officials cited a sole source justification in circumventing the full and open competition requirements of the FAR.9 We found that wage rates for independent contractors are determined, not through a competitive bidding process, but rather are set by the district, with approval from USMS headquarters. We observed that the discretion afforded the districts resulted in broad variances in hourly wage rates from district to district, ranging from a low of $12 in the Central District of California, which includes the Los Angeles metropolitan area to a high of $35 for select guards within the District of Columbia Superior Court. We could not attribute wage variances to cost-of-living factors because wages in some metropolitan areas, such as Los Angeles, with an hourly wage rate of $12, were lower than that of more rural areas such as the Southern District of Texas and the Southern District of Iowa, which had hourly wage rates of approximately $18. Rather, the variances stem from the fact that some districts established wage rates for independent contract security guards commensurate with wages for active duty sworn law enforcement officers, while others, such as JPATS, established wage rates commensurate with that of bailiffs and jailers, which is more in line with the duties required of the contract. In at least two districts, we found variances within the district itself. For example, the Southern District of New York paid its independent contract guards at an hourly wage of $27, except for one, a former deputy marshal, who was paid an hourly wage of $32. In the District of Columbia Superior Court, four independent contractors were paid an hourly wage of $35, which was double the contract rate of $17.50 paid to the District's other independent contractors. Such variances would not exist under contracts with guard company vendors. Under contracts with guard company vendors, wages are established by the vendor and are based upon the Department of Labor's (DOL's) prevailing wage rate determinations for the applicable service industry occupation, in accordance with the McNamara-O'Hara Service Contract Act of 1965.10 We determined that the high wages were offered, in part, to attract active duty sworn police officers to serve as contract guards, as was the case in the Western District of Washington, which offered an hourly rate of $25 hour. The problem we found with this strategy was that while the districts may succeed in recruiting some active duty police officers, in most instances the districts are forced to rely on generally less-qualified contract guards - usually retirees - because the active duty police officers are not always available when needed for work. Thus, in some districts the USMS is paying too much for independent contractors by setting wages for a labor pool of which it cannot take full advantage. On average, USMS independent contractors were paid at an hourly rate of $19.62 for guard services in FY 2003, $3.37 greater than the DOL's average prevailing hourly wage rate of $16.25 for bailiffs and jailers. Based on 611,638 total contract guard hours reported in FY 2003, we estimate that the USMS paid approximately $2 million in excess of the prevailing wage rate for comparable services. This does not necessarily mean that such cost savings could be achieved, but it does reflect a basic flaw in the districts' wage-setting methodology. Exceeding Procurement Authority The contracts for most of the independent contractors reviewed were not to exceed $25,000 and procurement authority delegated to contracting officers at the sites reviewed was generally for the same amount. USMS policy directive 9.31 D.8.e states, "should the contract per guard exceed the district's procurement authority, the action must be ratified by the Procurement Office. The districts and the JPATS shall properly justify the need to exceed the contract amount." This requirement is derived from the FAR, which states "Contracting officers may bind the Government only to the extent of the authority delegated to them." In 3 of the 7 sites reviewed - the Southern District of New York, the District of Columbia Superior Court, and the District of Puerto Rico - USMS contracting officers allowed payments to independent contractors in excess of the contract amount without providing USMS Headquarters written justification. Contracting officers in two of those sites - the Southern District of New York and the District of Puerto Rico - also exceeded their procurement authority. The effects of allowing payments in excess of contract amounts were twofold: 1) payments in excess of contract prices were not authorized, and 2) the contracting officers exceeded their procurement authority in allowing these excess payments. The District of Columbia Superior Court was an exception in that the contracting officer had procurement authority of $100,000. Thus, while the contracting officer allowed unauthorized payments in excess of contracted amounts, she did not exceed her procurement authority in doing so. In three of the six districts reviewed, we identified a total of $221,586 in unauthorized payments, as follows:
In general, the overpayments resulted from lack of oversight from the contracting officers and their respective contracting officer's technical representatives (COTRs). Our review of payroll totals for all of the 2,786 independent contractors employed in FY 2003 indicated that a total of 97 guards were paid in excess of their contract amounts by a total of $887,756. As of the third quarter of FY 2004, 26 guards had received unauthorized payments totaling $135,532. In addition to exceeding procurement authority, we also noted instances involving the districts' unauthorized use of independent contractors. USMS policy, as reflected in the Statement of Work for independent contractors, specifically delineates those services authorized under the contract (see Appendices III and IV). However, we noted instances in three of the districts reviewed in which the lack of controls over the procurement process led to the districts' use of contractors for unauthorized purposes, as follows:
The examples in the Western District of Washington and the Southern District of New York, in our judgment, were not only unallowable under 28 U.S.C. Section 565, but also represented a deliberate misuse of contract authority in order to circumvent civil service rules governing the hiring of government employees. We also noted that these incidents were neither new, nor isolated, based on the fact that the issue had been raised in at least one prior review conducted by the USMS's former Program Review Office.11 In that report, dated July 1, 1997, the Central District of California was admonished for hiring contract guards and then using them in an administrative capacity in violation of USMS policy and the contract's Statement of Work. We attributed these instances to the general lack of controls over the procurement of independent contractors, which has created a process that is susceptible to abuse. Use of Independent Contractors At the heart of the issue underlying the problems we found with the USMS's use of independent contractors is the question of whether USMS districts can realistically be expected to adhere to the rules regarding their procurement. In place of competitive bidding for independent contractors, we found informal recruiting practices in most districts. In place of sealed bids, we found arbitrary wage determinations. In place of contract monitoring, we found overpayments and circumvention of civil service rules. In short, the procurement practices we observed, while expedient, violated both USMS policy and the sections of the FAR upon which the policy is based. The obvious answer is to bring the districts' procurement practices into compliance with USMS policy, but this may not necessarily be the best solution. Requiring USMS districts to provide full and open competition in accordance with USMS policy (e.g., formal solicitations, bidders' lists, sealed bids) on 2,000 plus individual contracts annually, in our judgment, would result in an administrative burden that would largely negate the benefits currently derived from the flexibility and expediency afforded by use of independent contractors. Indeed, even with the current deficient procurement practices, officials from districts with large numbers of independent contractors commented on the administrative workload required in managing so many individual contracts. The fact that the districts have almost universally ignored the requirements of USMS policy governing the procurement of independent contractors constitutes a tacit rejection of the policy, and indicates that full implementation of the policy is not practicable. Thus, the dilemma facing the USMS: The districts' current procurement practices are fundamentally flawed and susceptible to abuse, and need to be brought into compliance with USMS policy and federal procurement regulations. However, full implementation of the procedures required to bring the districts into compliance on the procurement of independent contractors would create a tremendous administrative burden, and therefore is not practicable. In our judgment, given that neither the continuance of the current deficient procurement practices nor the full implementation of USMS policy for procurement of independent contractors are acceptable solutions, the USMS should consider alternatives to the use of independent contractors for guard services. The following is a discussion of the possible alternatives: Vendor Contracts (Company Guards) To the extent possible, the USMS could expand its use of guard company vendors. Currently, the USMS uses contract vendors primarily to provide courtroom security via the CSO Program and for guarding inmates receiving outside medical care. Our review determined that USMS districts rarely use vendor guards for court-related prisoner handling activities, preferring instead to use independent contractors. District officials replying to our questionnaire on the use of independent contractors often stated that they preferred independent contractors to company guards primarily because it provided them the ability to individually screen candidates and therefore ensure the quality of the guards hired. While we have noted in prior audits that the quality of company guards does not always meet USMS established criteria, it is the responsibility of the districts, particularly the contracting officers and COTRs, to ensure that vendors provide qualified guards (See Prior Reports Section in the Introduction on page 4). Guard companies have a contractual obligation to provide fully qualified and trained individuals to perform guard duty at the time and place required. Contractors who do not meet USMS requirements should be replaced with contractors who can meet those requirements. Part-time and Temporary Employees In 1978, the Federal Employees Part-time Career Employment Act (Act) established a continuing program for the promotion and expansion of part-time employment. The Act made significant changes in federal personnel management practices, which included: 1) narrowing the definition of part-time career employment from scheduled work of less than 40 hours per week to scheduled work of between 16 and 32 hours per week, and 2) changing the method for counting part-time employees against the agency personnel ceiling by requiring the counting of part-time employees on the basis of the fractional part of the 40-hour week actually worked. According to the Act, Congress found that part-time employment benefits the government by offering management more flexibility in meeting work requirements and filling shortages in various occupations. Also, the Act required the establishment of part-time career employment programs to be used in connection with establishing part-time career employment goals. We noted in our review of USMS payroll reports that over 90 percent of the independent contractors used in FY 2003 worked fewer than six months during the year. The amount of time contractors worked ranged from a low of 2 hours to a high of 2,110 hours. On average, independent contractors worked about 200 hours over the course of the year. In fact, the 605,897 hours worked by the 2,786 independent contractors on the payroll in FY 2003 equated to only 291 full-time positions for the year. Despite the fact that independent contractors represent, for the most part, a workforce of temporary, part-time workers, our review of the USMS's contract operations during this and prior audits did not indicate that the USMS has ever pursued a part-time program or explored the use of part-time or temporary employees for guard services. While the use of part-time employees in districts with large fluctuations in courtroom activity would not be effective, we believe that the implementation of such a program may be a feasible alternative to the use of independent contractors in districts that have a constant predictable workload. Cooperative Agreements/IGAs Current USMS policy requires that districts obtain guard services to the extent possible from existing IGAs with local jails. Toward that end, the districts might also negotiate agreements with local law enforcement or corrections agencies to provide guard services and prisoner transportation. One of the districts surveyed had indicated an interest in pursuing the use of a cooperative agreement with the local police department in lieu of using independent contractors. Expanded use of these agreements could alleviate the districts' reliance on independent contractors for transporting prisoners to and from federal courthouses and medical facilities. The USMS districts' procurement of independent contractors is not in compliance with USMS policy or the FAR. Deviations from USMS policy and the FAR included the lack of competitive bidding, arbitrary wage determination, unauthorized contract payments, exceeding of procurement authority, and unauthorized uses of independent contractors. The USMS must either bring its procurement process into compliance with its own policy or seek alternative methods for procuring the necessary guard services. However, given the impracticality of fully competing nearly 3,000 individual contracts annually, the USMS should consider alternative methods for staffing prisoner-handling operations in the districts. We recommend the USMS:
Our review of over 200 contract guard case files revealed internal control weaknesses in the hiring and monitoring of these independent contractors. We were unable to establish whether contractors were qualified for guard service for 23 percent of the contracts reviewed due to missing case files or missing documents. For those cases where adequate documentation existed, we determined that at least 12 individuals (6 percent) were hired for guard service with little or no law enforcement experience, in violation of USMS policy. In addition, we were unable to verify that guards had been fully trained, had met fitness standards, and had received a required background investigation. In general, the problems noted resulted from the lack of a systemized approach to hiring and monitoring contracts by USMS district contracting officers and Contracting Officers Technical Representatives (COTRs). Failure to address these weaknesses may allow poorly qualified, ill-trained individuals to obtain guard contracts, which in turn could jeopardize the safety of the judiciary and the general public. There are inherent risks associated with the transportation and guarding of federal prisoners outside of a jail or detention center. To minimize these risks, the USMS has established policies and procedures to ensure that independent contractors hired for guard service possess the skills and experience necessary to perform their duties. However, we found that weak internal controls in district oversight of contract operations have resulted in poorly maintained case files that make it difficult to verify whether contract guards: 1) meet USMS experience requirements for guard service, 2) are medically fit for duty, 3) have received the required training, 4) have qualified with firearms on a timely basis, and 5) have received a background investigation. Qualifications For Contract Guards Not Adequately Documented According to USMS policy, independent contractors hired for guard services must have qualifying experience under one of the following five categories: 1) active duty sworn state or local law enforcement officers; 2) reserve sworn state or local law enforcement officers; 3) former/retired sworn federal, state, or local law enforcement officers; 4) former/retired military police; or 5) private security/correctional officers (see Appendix III). Properly determining and documenting qualifying experience is important because it affects the specific requirements needed by a contract guard to meet USMS guard standards. Category 1 and 2 guards, for instance, need only affirm that they meet specific USMS standards, e.g., weapons qualified, physically fit, sufficiently experienced in law enforcement. On the other hand, category 3, 4, and 5 guards must provide medical fitness certification signed by a doctor and be weapons qualified by the USMS.12 We reviewed 223 case files to determine whether the contract guards hired had the experience necessary to qualify for guard service. We found that the districts and the JPATS had not documented in the case files the contract guards' category of qualifications because this information is not required by USMS policy directives. Because the qualifying experience was not formally documented, we had to review documents in the case files to determine the selected guards' qualifying experience. We were unable to do so for a significant number of cases because the files lacked sufficient documentation to make a determination. The USM-234 Personal Qualifications Statement, for instance, the main document used to determine a contractor's qualifications was missing from 51 case files, or 23 percent of the 223 files we examined. Lack of documentation was generally concentrated in two of the sites reviewed. In one district, 21 case files, or 84 percent of the 25 case files reviewed, lacked the necessary documents for determining the contractors' qualifications. The USM-234 was not on file for any of the independent contractors reviewed in another district. Case files were missing for 10 of the 30 contractors, and the remaining 20 case files reviewed did not contain the USM-234. For those files reviewed that did contain sufficient documentation, we determined that at least 12 of the guards hired lacked the experience necessary to qualify as contract guards. Four of the 12 individuals hired had no law enforcement experience at all, but rather background as a sales clerk, a receptionist, an administrative clerk with the USMS, and an airport screener. While 2 of the 4 guards were no longer active at the time of our audit fieldwork, the receptionist and the airport screener were still active at the time of our review. District officials commented that while these contract guards may not have had law enforcement experience at the time they were hired, they now have qualifying experience through their guard service with the USMS. However, we believe that hiring unqualified individuals for prisoner handling operations represents a breakdown in internal controls that places an undue risk on all parties involved in the judicial process. Medical Certifications Not Consistently Documented In addition to meeting experience requirements, contract guards are also expected to meet physical fitness standards. To ensure that guards maintain certain fitness-for-duty standards, they are required to annually submit a form, signed by the guard's physician, stating that the contractor can physically perform the duties required. These requirements include that the guard must: 1) be able to lift or carry 45 pounds, 2) be able to reach, grab, and climb, and 3) have the ability for rapid mental and physical movement. If a contractor is also an active-duty law enforcement officer, the USMS requires only that the guard's agency sign an affirmation that the contractor meets the agency's fitness standards. We reviewed 132 active case files to verify that guards were medically certified as fit for duty. Our tests of six districts and the JPATS revealed a range of results. On one end of the spectrum one of the six districts and the JPATS had fully documented case files. At the other end of the spectrum were three districts that each had poorly documented case files. Somewhere in between were two districts, in which most but not all case files reviewed were adequately documented. Independent Contractors'
The physical fitness of retirees in the guard service was an issue with some of the USMS employees and judges that we interviewed. While most of the 14 judges interviewed stated that they were satisfied with the performance of the independent contractors, one of the judges who responded by questionnaire did express concern stating, "The contract guards are usually older (some retired) or have worked a previous shift(s) for their regular employer. Due to a combination of these factors, contract guards are more likely to fall asleep during court proceedings." It should be noted that while deputy marshals are medically certified by an agency physician, independent contractors are allowed to have their own private physicians sign their certification forms. As such, skepticism is required as to the validity of some certifications. For example, we determined that at least three independent contractors who were former law enforcement officers had retired from their respective police agencies on medical disability. In addition, the contracts for at least four of the former guard files reviewed in one district were terminated because they did not meet fitness-for-duty standards. All were category 1 guards, i.e., active duty sworn law enforcement officers who had been affirmed as fit-for-duty by their police agency. A guard with a physical disability or deteriorating health may not be able to respond adequately in an emergency, which could jeopardize the safety and welfare of the judiciary and the general public. Inability to Verify Contractor Training USMS policy requires that independent contractors receive specific training within the first 30 days of service and annual refresher training thereafter. The policy allows past or current agency training to be used in lieu of USMS training for categories 1 and 2 guards, but such training must be annotated on the Affirmation of Qualifications statement in the guard's contract file.14 However, there was some ambiguity in this matter, as the Statement of Work for personal services contract guards clearly identifies USMS training for these same contractors, including the USMS policy directives on the "Use of Force, Firearms and Code of Professional Responsibility." In addition, all categories of independent contractors must review and become familiar with USMS policies and procedures regarding cellblock operations, JPATS operations, in-district prisoner movement, and the prisoner tracking system. Districts also have to ensure that independent contractors reviewed these USMS policies and procedures. We reviewed a sample of 223 current and former independent contractors to determine whether they were provided the required training on the use of force and whether they viewed videos on bloodborne/airborne pathogens, prisoner restraints, and prisoner transportation. Our results are presented in the following table: Initial and Refresher Contractor Training
As indicated in the table above, in the majority of case files reviewed we were unable to verify that contractors had been provided with the required training. Documentation of training in one district was virtually nonexistent. Three districts were only marginally better. Although not reflected in the totals, documentation of training in the case files for current active contractors in another district and the JPATS operation hub was for the most part complete. Firearms Qualifications Not Always Timely The Statement of Work for independent contractors states that contractors shall be unarmed unless otherwise directed (see Appendix IV). Unarmed contractors are used to guard prisoners and provide security in the courtroom and the cellblock. For contractors that the USMS designates as armed guards, USMS firearms policy requires that the guards qualify with firearms at least once every six months (see Appendix V). Of the 132 active independent contractors selected for review, we determined that 77 active contractors, or 58 percent, were required to be armed and 41 active contractors, or 31 percent, were unarmed. We could not determine whether the remaining 14 active contractors, or 11 percent, were required to carry and qualify with firearms because either their files or their Weapons Qualification Forms (USM-333) were not available. We tested the 77 active contractors identified as armed to determine whether they had completed firearms qualifications on handguns and, if so, whether they had qualified in a timely manner. If the qualification was not timely, the time elapsed from the prior qualification was noted. Our results are presented in the following table: Firearms Qualifications
With the exception of five armed contractors who did not qualify at all with their firearms, we concluded that armed contractors at the sites reviewed did receive firearms qualifications. However, there was no indication of any corrective action taken to ensure that the five armed contractors qualified with their firearms. In addition, the required training for 23 of the 77 armed contractors, or 30 percent, was not provided in a timely manner, i.e., every six months, as required by USMS firearms policy. Independent contractors in four of the six districts we reviewed had gone a year or longer without re-qualifying with their firearms. Limited Background Investigations Our review of active case files at the sites selected indicated that district offices are not in compliance with USMS policy concerning background investigations for independent contractors.15 We could not verify that the required background investigation had been conducted in 86 case files, or 65 percent of the 132 active case files reviewed, as shown in the table below: Limited Background Investigations
To the extent that the USMS fails to perform the necessary background checks on applicants, it fails to effectively mitigate the risk that USMS districts will hire individuals unqualified or unsuitable for guard duty. In general, the deficiencies discussed in this finding are in large part attributable to poor contract monitoring on the part of contracting officers and their respective COTRs.16 This is not to say that contracting officers and their COTRs were not monitoring the contractors themselves. Indeed, our interviews with contracting officers and their COTRs indicated that they were personally aware of contractors' individual performances in the completion of their assigned duties. However, the sites shared in common the lack of a reliable system to record and maintain contract documentation related to hiring, training, and evaluating independent contractors. A comprehensive system of rosters and databases would provide the USMS with an effective means to collect and track information related to contract activity. Toward that end, we noted that at least three of the six districts had implemented signed rosters to document training completed and videos viewed by independent contractors. In addition, the JPATS operation had recently implemented a database for monitoring training provided to its independent contractors. The JPATS database includes contractors' orientation, firearms qualifications, ethics training, fit-for-duty requirements, JPATS-specific training, annual refresher training, and affirmation of work qualifications forms. In our judgment, the steps taken in the aforementioned districts and JPATS to document and track guard training represent a best practice that USMS management should use in developing a system to implement in all districts. We also noted that only one district had implemented the use of written evaluations of its independent contractors. In addition, another district was developing an evaluation for its independent contractors, according to the District's administrative officer. We highlight the use of a formal evaluation process as another best practice that the USMS should implement in all districts. Based on our review of contractor files for both active and former contract guards, we concluded that internal control weaknesses exist in the hiring and monitoring of independent contract guards. We determined that at least 12 individuals without qualifying experience had obtained guard contracts. Further, we could not verify for a significant number of guards that once hired, they receive the required training and background checks. We attributed these internal control deficiencies to a lack of a systemized approach on the part of contracting officers and COTRs to documenting and maintaining contract guard activity. Failure to address these weaknesses increases the risk that breakdowns in the process will result in unqualified, ill-trained individuals obtaining guard contracts.
Footnotes
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