[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
GSA ARMY FEE ASSISTANCE
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HEARING
BEFORE THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 10, 2015
__________
Serial No. 114-50
__________
Printed for the use of the Committee on Oversight and Government Reform
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Available via the World Wide Web: http://www.fdsys.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
97-473 PDF WASHINGTON : 2015
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio ELEANOR HOLMES NORTON, District of
TIM WALBERG, Michigan Columbia
JUSTIN AMASH, Michigan WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee JIM COOPER, Tennessee
TREY GOWDY, South Carolina GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida TED LIEU, California
MICK MULVANEY, South Carolina BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina MARK DeSAULNIER, California
ROD BLUM, Iowa BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama
Sean McLaughlin, Staff Director
David Rapallo, Minority Staff Director
Katie Bailey, Professional Staff Member
Sarah Vance, Clerk
C O N T E N T S
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Page
Hearing held on September 10, 2015............................... 1
WITNESSES
Ms. Kaela Hensley, Army Spouse
Oral Statement............................................... 6
Written Statement............................................ 7
Ms. Karmon Dyches, Army Captain Appearing in Personal Capacity
Oral Statement............................................... 7
Written Statement............................................ 9
The Hon. Carol Fortine Ochoa, Inspector General, U.S. General
Services Administration
Oral Statement............................................... 9
Written Statement............................................ 10
Ms. Stephanie L. Hoehne, Director, Family and Morale, Welfare &
Recreation G9, Instalation Management Command, U.S. Army
Oral Statement............................................... 10
Written Statement............................................ 12
Mr. Gerard Badorrek, Chief Financial Officer, U.S. General
Services Administration
Oral Statement............................................... 12
APPENDIX
Statement of Dr. Lynette M. Fraga, Executive Director, Childcare
Aware of America.............................................. 50
Letter to Mr. Chaffetz from Ms. Hoehne, Director, Family and
Morale, Welfare and Recreation G9, Installation Mgmt. Command.. 58
GSA ARMY FEE ASSISTANCE
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Thursday, September 10, 2015
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 9:02 a.m., in Room
2154, Rayburn House Office Building, Hon. Jason Chaffetz
[chairman of the committee] presiding.
Present: Representatives Chaffetz, Mica, Jordan, Amash,
Meadows, DeSantis, Buck, Walker, Blum, Hice, Russell, Carter,
Grothman, Hurd, Palmer, Cummings, Norton, Lynch, Connolly,
Duckworth, Lawrence, Lieu, Plaskett, and DeSaulnier.
Chairman Chaffetz. Good morning. The Committee on Oversight
and Government Reform will come to order.
And, without objection, the chair is authorized to declare
a recess at any time.
We thank our witnesses for being here today. We're going to
be dealing with an important subject, the Army Fee Assistance
Program that is in disarray. It is, this is a case of outrage
and mismanagement. We will explore how a well-intentioned
program created by Congress has been mishandled by the very
government managers entrusted to administer and care for it.
The Army Fee Assistance Program, or AFA, compensates eligible
Army families who pay for third-party childcare off base when
none is available on base.
In October 2014, the Army transferred the responsibility
for administering the program from a private entity, Child Care
Aware, to the General Services Administration, the GSA. Quality
of service immediately began to suffer, a substantial backlog
developed, applications and recertifications were not being
processed. And, ultimately, payments were not being provided.
So Army families, nearly 10,000 of them, struggled to pay their
childcare providers. Desperate for help after payments stopped
without warning, Army families struggled to break through to
customer service to get answers.
Due to insufficient staffing, software, and planning, their
calls and emails for help literally went unanswered. In fact,
we're going to hear about how they were destroyed. In addition,
GSA deleted 4,000 estimated voice messages and an unnumbered
number of emails.
In transitioning the program to GSA, the Army made promises
it couldn't keep. And families were left holding a bill for
childcare they couldn't pay. Upon announcing the transition in
January 2014, the Army told families, ``Our goal is to assure a
seamless transition for our Army families and childcare
providers.'' It went on as the Army assured families, ``There
will be no disruptions in payments,'' and that, ``The Childcare
Fee Assistance Program will continue to be issued monthly.''
That was not true. It's not true today. And a lot of families
have unnecessarily had to finance this and suffer through the
consequences of it.
Some of them have been devastating to families who simply
cannot afford to keep up with the payments. They were told by
their employer, they were told by the U.S. Government, they
were told by the United States Army that this would be taken
care of. They entrusted them. They worked for them. And they
let them down.
The transition was riddled with problems that, in turn,
hurt Army families. This is a quote from one parent
participating in the program from the State of New York. The
parent said, ``The GSA Army Childcare Office is 2 months behind
on payments to my childcare provider. This means I have to pay
out of pocket for what they aren't covering or I have to remove
my child from the facility. The childcare provider must still
be paid whether it is from me or the GSA. I have sent numerous
emails and placed many phone calls. And there still is no
solution. I continue to be told I will get a call back. I know
of at least five other families also affected by this
incompetence. The program should not be offered to soldiers and
then continue to be inconsistent with payments. Many of us
can't afford to keep our children in childcare without this
assistance. And it has placed a hardship on many of us. I'm
also pregnant with another child and have placed inquiries with
questions and no one has answered me at all. This is
unacceptable and very frustrating to those trying to keep up
with the payments.''
We find this to be consistent with what we believe are
thousands of people going through similar challenges. According
to the inspector general, the backlog of unprocessed family
actions and unanswered phone calls and emails is almost 26,000.
We're not talking about 10 here or 20 there, 26,000. This is
totally unacceptable. These individuals deserve answers.
To handle the backlog, GSA sought outside help but botched
the award of the contract. Given the huge backlog, GSA awarded
a second contractor to provide additional support to manage the
program, including 20 additional individuals to fulfill
requests and field phone calls and emails. Apparently, in a
rush to throw money at the problem, no one properly vetted the
individuals hired by the contractors. In reviewing those 20
individuals, who were given access to personally identifiable
information of the Army families participating in the program,
the Office of Personal Management found that 3 of the 20
contractors should never have been hired. One of the
individuals even had an outstanding arrest and bench warrant
pending against them. The other two individuals had severe
issues, including prior bankruptcy filings and financial liens.
As part of their normal work duties, these contractors were
given access to Army families' personal identifiable
information, including Social Security numbers, birth
certificates of Army children, tax returns, locations of
childcare providers, times the children were in childcare, home
addresses, home phone numbers, bank routing information--for
people who have an outstanding warrant for their arrest. Also
highly problematic, the inspector general found these
individuals were never given the required privacy training, nor
were they required to sign non-disclosure agreements required
by the contract.
One bright spot, once GSA became aware of the compromise of
some families' information, it did take immediate steps to
rectify the situation. But it should have never happened. It
did so by removing these contractors, offering families free
credit monitoring services, and creating an action plan in
response to recommendations by the inspector general.
I'm tired of the U.S. Government just saying hey, we're
going to give you credit monitoring. That ain't going to cut it
anymore. We keep doing this by the millions. Tens of millions
of American workers working for the Federal Government are
being offered credit services. That ain't going to cut it, and
here we have another case of this.
However, the GSA then took a step backward, another
security breach occurred. In this second instance, GSA failed
to set appropriate controls and allowed unauthorized users to
gain access to childcare subsidy information of 8,000 families.
We'll hear more today from the inspector general about this
second failure of GSA to protect families.
Army is considering moving the entire childcare subsidy
program to the United States Department of Agriculture.
Obviously it belongs in the Department of Agriculture. But at
this point, anything seems better than the current situation.
Another transition could occur as early as December of 2015.
But for families who are suffering through this now, it doesn't
sound like an acceptable answer.
Given the rocky transition to GSA, we need to understand
how the Army plans to avoid the problems that occurred during
the prior transition. It is unclear, however, how GSA and the
Army plans to ensure we won't experience another boondoggle.
Let me try to put in perspective how bad this is. In announcing
the transition to the GSA, the Army asserted it would save 50
percent of program administration costs or $4 million. Sounds
like a laudable goal. Let's save $4 million. We probably all
want to do that. In reality, the transition actually increased
administration costs due to the need to award additional
contracts in information technology.
In fact, it cost an extra $4.4 million. So instead of
saving $4 million, it cost $4.4 million extra, an $8.4 million
swing. And to put in this perspective, Child Care Aware was
operating with good software and 39 people and servicing Army
families with minimal complaints, 39 people. The GSA has 184
employees, has plans for 37 more contractors, and still isn't
getting the job done despite spending $4.4 million more than we
were spending before.
Our Army families, they sacrifice, they've got to be
focused on their job. There's a reason why childcare services
are offered. Many of them are offered on base. But in those
situations where they're not, we need to be able to take care
of those children. This is an absolute boondoggle. Desperate
questions for the GSA in how they could botch this thing. They
literally are operating on Excel spreadsheets, erasing emails,
destroying emails, getting rid of voicemails. It's just totally
and wholly unacceptable. And the Army and their attitude
towards this is also unacceptable.
The question, right up to the Secretary's office, what is
the United States Army going to do about this? We deserve
better. The soldiers deserve better. And we're here to help fix
that.
So with that, I would like to recognize Mr. Lieu. Ranking
Member Cummings I think will be here a little bit later. But in
his place, we're honored to have the gentleman from California,
Mr. Lieu. And we recognize him for 5 minutes.
Mr. Lieu. Thank you, Mr. Chairman. I commend you for
calling this important hearing. I want to thank your staff for
working together in a bipartisan manner to provide oversight
for a critical program impacting our military families. Having
served on active duty and as a lieutenant colonel in the Air
Force Reserves, also as a husband and father of two children,
this issue has hit particularly close to home.
The GSA inspector general's report shows that with respect
to childcare, the Army and the GSA have failed our military
families. Mismanagement of the Army's program to help military
families pay for childcare has caused inexcusable backlogs in
processing payments and unnecessary financial hardships to
thousands of military families. This program offers subsidies
to help families pay for childcare when it is not available on
base. Members of the military and their families sacrifice so
much for our country. In return, we owe it to them to fight for
and protect benefits that they rely upon and deserve.
And as we'll hear from two of our witnesses today, flaws in
the program's administration have significant consequences for
military families. Congress created this program on a
bipartisan basis to help military families afford childcare. So
it's fitting that our committee is addressing this problem
jointly. The National Defense Authorization Act for fiscal year
2000 authorized the Department of Defense to provide financial
assistance to eligible childcare providers who service military
and Federal employees. Those subsidies allow military families
to save money on childcare costs.
Prior to 2014, the program was jointly administered by the
GSA and Child Care Aware of America, a non-profit organization
helping families identify high-quality, affordable child care.
GSA and CCA administered different components of the program,
with GSA having responsibility for approximately 200 families
and CCA servicing nearly 9,000 families. In 2014, the Army
consolidated the program's administration under GSA which
promised annual savings of $4 million. But this deal proved too
good to be true.
After assuming full responsibility for the program on
October 1, 2014, GSA realized it had grossly underestimated the
complexity and scope of the personnel and IT infrastructure
needed to administer childcare subsidies for an additional
9,000 families. I have here a statement from Child Care Aware
of America, the previous administrator of the contract. In
January 2014, they were processing subsidy payments for all of
their program participants within the Army's required 10-day
period. This is in contrast to GSA, which is now responsible
for the program, and whose own IG reported earlier this week
that GSA was taking up to 7 months to process the payments. Mr.
Chairman, I ask unanimous consent that the CCA statement be
entered into the record.
Chairman Chaffetz. Without objection, so ordered.
Mr. Lieu. According to a previous report by the IG this
past April, by January 2015, GSA had developed a significant
backlog over 11,500 childcare subsidy actionable items awaiting
processing.
On Tuesday, the IG issued an updated report finding that
GSA officials had not noticed since 2011, ``GSA's existing
processes and personnel could not support a 9,000 family
growth.'' The report also found that prior to the transfer,
GSA, quote, ``did not perform a full needs assessment to
determine what IT systems were necessary to accommodate the 45-
fold increase.'' As a result of those transition planning
deficiencies, the Army has had to spend, as the chairman noted,
an additional $4.4 million to keep the program afloat above and
beyond the original $4 million contract price.
And because a significant backlog persists and continues to
grow, additional funding will likely be needed to correct the
serious flaws in the program's administration. In addition to
GSA's shortcomings, there was, at a minimum, inadequate Army
oversight of the program's transition planning and
implementation and perhaps a lack of due diligence in selecting
GSA as the sole program administrator.
We'll hear from Stephanie Hoehne, the top management for
the Army's program, who said in her written statement, ``The
Army did not provide sufficient oversight to the transition for
the risk involved nor recognize the magnitude once the problems
surfaced.'' Going forward, the Army and GSA must immediately
identify and implement concrete measures to correct these
serious flaws.
GSA as a program administrator and the Army as a program
owner share responsibility for ensuring the successful
operation of the Childcare Fee Assistance Program. Together
they must take steps to eliminate the current backlog so that
our military families do not needlessly face financial
hardships to pay for childcare.
I look forward to hearing for a timetable today to show how
they plan to fix this program. As we learned from the IG's
recent report, one family is now filing for bankruptcy as a
result of subsidy payment delays. And that's entirely
unacceptable. It's also unacceptable that the IG report's
findings show that thousands of emails and voicemails from
military personnel was simply deleted by GSA.
Our Nation's families deserve better. And it's my hope that
by continuing working in a bipartisan manner, we can help get
this program back on track. Thank you, Mr. Chairman.
Chairman Chaffetz. Thank the gentleman.
Chairman Chaffetz. I'll hold the record open for 5
legislative days for any members who would like to submit a
written statement.
Chairman Chaffetz. We're now going to recognize our first
panel of witnesses. Our first witness is Ms. Kaela Hensley, an
Army spouse from Fort Meade, Maryland. My understanding is she
has a young daughter who is 2 years old who has been engaged in
this program. And she's never testified before Congress. We're
honored and privileged to have you here. And we look forward to
hearing your personal story.
We're also joined by Captain Karmon Dyches, a research
psychologist at the Center for Military Psychiatry and
Neuroscience at the Walter Reed Army Institute of Research. Let
the record reflect that Ms. Dyches is appearing in her personal
capacity. My understanding is she too has a 2 year-old daughter
who is engaged in this program. And I don't believe she has
ever testified before Congress. We look forward to hearing from
Captain Dyches as well.
We also have the Honorable Carol Fortine Ochoa, inspector
general for the General Services Administration, recently
confirmed by the U.S. Senate after an extensive process. Sorry
that process takes so long over in the Senate. This is your
first testimony before Congress I believe as the Senate-
confirmed inspector general. So we're honored to have you here
and learn of your perspective and the good work that so many of
the people in your organization have done to get us to this
point.
We also have Ms. Stephanie Hoehne, director of Family and
Morale, Welfare and Recreation, G9 Installation Management
Command for the United States Army.
And Mr. Gerard Badorrek--did I pronounce that properly? I
hope so--chief financial officer for the General Services
Administration. We welcome you all.
Pursuant to committee rules, all witnesses are to be sworn
before they testify. So if you will please rise and raise your
right hand.
Do you solemnly swear or affirm that the testimony you're
about to give will be the truth, the whole truth, and nothing
but the truth? Thank you. Please be seated.
Let the record reflect that all witnesses answered in the
affirmative.
In order to allow time for discussion, we would appreciate
if you would limit your verbal comments to 5 minutes. Your
entire written statement will be entered into the record. It
can be a very brief statement. But we want to give you a chance
to each kind of briefly tell your story and give your
perspective. And then at the conclusion of that, then we'll get
to the question and answer portion of it. And Ms. Hensley, we
now recognize you for 5 minutes.
WITNESS STATEMENTS
STATEMENT OF KAELA HENSLEY
Ms. Hensley. Good morning, Chairman Chaffetz, Mr. Lieu, and
other distinguished members of the committee. Thank you for
giving us the opportunity to speak about our experience with
General Services Administration's handling of the Army Fee
Assistance Program.
I am a veterinary technician and my husband has served the
U.S. Army for 11 years. When I finished school, I took on a new
job as a vet tech. We tried to enroll our daughter into on-post
child development center. That's when we were informed the wait
list would take a year which meant AFA was our only option. My
husband and I never imagined the stress, the sleepless nights
and tears you would have to endure because of this decision.
Pinching pennies to make ends meet and feeling as a parent you
have failed your child because you're unable to provide them
with the basic essential things such as proper education, food,
diapers, and clothing.
Have you ever had to make the decision whether you should
fill your gas tank up or buy bread for your family? These were
the types of decisions GSA forced my husband and I to make. We
went as far as canceling our cable subscription and switching
cell phone provider just to have a couple more dollars in our
bank account. We even used money from our savings to help pay
for daycare, money that was supposed to be going towards
purchasing a home. When our savings was no longer an option, my
husband was placed in a humiliating position when he had to ask
his parents for money.
Because of GSA, I was within 2 days of submitting my 2
weeks' notice and removing our daughter from daycare. My
husband and I made it through the 4 months of financial
hardship. We were fortunate enough to have family who could
help us in this trying time. But as for other thousands of
families who were and probably still are going through this,
might not be as fortunate. We cannot be alone in this struggle.
Other Army families are likely experiencing similar or even
worse hardship.
I hope after today, we will have that peace of mind knowing
someone is listening and ready to take action on this matter.
Thank you for the opportunity to speak before you.
Chairman Chaffetz. Thank you.
[Prepared statement of Ms. Hensley follows:]
[For complete submitted testimony, please see the following
website: https://oversight.house.gov/hearing/gsa-army-fee-
assistance]
Chairman Chaffetz. Captain Dyches, you are now recognized.
STATEMENT OF KARMON DYCHES
Ms. Dyches. Chairman Chaffetz, Mr. Lieu, and other
distinguished members of the committee, thank you for the
invitation and the opportunity to appear before you today to
discuss the General Service Administration's management of the
Army Fee Assistance Program.
My name is Karmon Dyches. And while I am a captain in the
United States Army stationed at the Walter Reed Army Institute
of Research in Silver Spring, Maryland, I am here today in a
personal capacity. And, as such, these views are my own and do
not represent the position of the Walter Reed Army Institute of
Research, the U.S. Army, or the Department of Defense. My
husband is also a member of the U.S. Army. We live in Laurel,
Maryland with our 2 year-old child who attends a privately-
owned daycare in the town in which we reside.
The purpose of the AFA Program is to provide a subsidized
alternate daycare option to Army families who are
geographically dislocated from on-post daycare or in the event
there is a long wait list for an on-post daycare. My family
falls not into just one but both of these categories.
The U.S. Army does a tremendous job taking care of their
soldiers and their civilians. The AFA Program is just one of
many examples of an Army program designed to help families
build and plan for their futures. However, as you have read in
my written statement, my family's childcare provider has
experienced delays in payments and recertification due to the
mismanagement of the AFA Program by the GSA.
What I would like to convey to you now are the specific and
lasting impacts this mismanagement has caused. My husband's end
of time of service date is approaching. It would be beneficial
for both of us to move closer to his new job location and
closer to my current duty station. However, due to the AFA
mismanagement by the GSA, we are actually afraid of moving our
daughter to a different daycare. We fear that a new provider
won't be as forgiving and understanding as our current provider
is about the delays in payment. And we fear that a new packet
won't ever be approved, as it took 10 months to simply
recertify an existing packet.
We also happen to have a great relationship with our
childcare provider. However, if that weren't the case and we
felt we should move our daughter for personal or even safety
concerns, we would actually have to decide between leaving her
there or undoubtedly paying for full-time daycare elsewhere
until a new packet was approved. This is unacceptable. Those
who serve our country make many sacrifices. But we absolutely
should not have to sacrifice the health and the safety of our
children while serving the United States of America.
Again, my husband and I are a dual military couple. Daycare
isn't a choice, it's a requirement. Additionally, my husband
and I have had to delay having a second child due to the fact
that we cannot afford to pay for daycare for two children given
the current issues we are facing right now. If the GSA were not
mishandling this very critical Army program, we would regain
the freedom to plan for our future. Army Fee Assistance
families have to know when this will end. How can anyone plan
for a future without knowing what that future will likely cost?
Furthermore, if I said that the GSA's mishandling of the
AFA Program has had no impact on my professional life, I
wouldn't be telling the truth. I have on many occasions put the
mission aside to proactively attempt to figure out why our
packet wasn't being reviewed or why our childcare provider
wasn't being paid. Due to frustration and financial burdens, I
have wept alone at my desk, talked at length with close battle
buddies, and even described our struggles with the GSA to my
chain of command. Everyone has been extremely supportive. But,
in the end, there isn't anything they can do to fix this.
However, with your help, I believe a resolution is possible.
In short and in my opinion, the GSA has failed to uphold
its promise to Army families. There no longer seems to be
accountability to ensure soldiers are not encountering extra
burdens or unexpected costs associated with child care. The GSA
has failed to allow soldiers to plan not only for long-term
goals, but for immediate needs. Given the difficulty my own
family has had with the GSA's mishandling of the AFA Program,
it's not hard to imagine what other Army families have gone
through.
Imagine not being able to afford groceries or gas because
you had to paid for unexpected childcare costs. Imagine being a
new mother or father and being forced to choose between
maintaining a new career or to quit working because the
unexpected cost of daycare is more than your monthly paycheck.
Imagine having your child kicked out of daycare because your
childcare provider had their own bills to pay and needed to
work with a more reliable family. Imagine dealing with all of
that while your spouse is deployed.
Now imagine being that deployed mother or father and
getting those monthly phone calls from home about these issues
and tell me if you think that your mind would actually be on
the mission. Thank you for your time and for your service.
Chairman Chaffetz. Thank you.
[Prepared statement of Ms. Dyches follows:]
[For complete submitted testimony, please see the following
website: https://oversight.house.gov/hearing/gsa-army-fee-
assistance]
Chairman Chaffetz. Ms. Ochoa, you're now recognized for 5
minutes.
STATEMENT OF THE HONORABLE CAROL FORTINE OCHOA
Ms. Ochoa. Good morning, Mr. Chairman, Mr. Lieu, and
members of the committee.
Thank you for the opportunity to testify about the office
of the inspector general's report concerning GSA's handling of
the Army childcare subsidy program or AFA.
Problems in the GSA's administration of the program are
significantly affecting Army families. Starting in 2003, GSA
administered the subsidy program for approximately 200 Army
families whose children were enrolled exclusively in Federal
childcare centers. In April 2014, GSA agreed to expand its
administration of the Army program to include Army families
enrolled in private childcare centers as well. This added over
9,000 families and 5,000 childcare providers to the program.
GSA administers the program based on Army requirements.
Army families must provide documentation showing their
eligibility for the program. And providers must show they are
licensed and qualified to provide the care. While a family
awaits approval of their subsidy application, they must pay all
childcare costs up front.
The OIG's evaluation of this program began in February of
this year after GSA's current administrator reported to us
serious concerns about the program, including a backlog then of
over 5,000 items. Our report found that from the beginning of
GSA's administration of the expanded program in August 2014,
through the end of July 2015, the program experienced
continually increasing backlogs of unprocessed subsidy
requests, unpaid invoices, and unreturned calls and emails.
We found that the primary cause of the increased backlogs
was GSA's failure to plan adequately for the expansion. GSA
officials were on notice well before implementation of the
expanded program that it would add over 9,000 families and that
GSA's existing processes and personnel could not support such
growth. Yet, GSA failed to streamline processes and scale up
staffing levels in advance of the expansion.
At the start of the expanded program, staffing levels were
far too low, staff lacked appropriate privacy training and
security screening, and the IT systems for the program were
inadequate and incompatible. Program personnel were soon
overwhelmed by the massive increase in workload, and the
backlogs began to mount. We found that GSA's efforts to gain
control of the backlogs have included hiring additional
personnel, changing its case management process, and adding
software applications with additional funding from the Army.
Despite these efforts, by the end of July, the backlog had
grown to nearly 26,000 unprocessed subsidy actions, unpaid
invoices, unreturned emails, and unreturned phone messages.
Army families enrolled in this program have experienced
inadequate customer service and substantial delays. Their phone
calls went unanswered. Their voice messages and emails were
ignored and deleted. Families have reported severe financial
and other hardships resulting from these delays. For example,
Army families reported being forced to consider having a spouse
quit a job or quit school in order to leave one parent at home
with their children. One family reported that their provider
had sent their account to collections. Another, that they were
facing bankruptcy.
In addition, Army families' sensitive information was
provided to contractors before they had completed required
background investigations. The sensitive information included
Social Security numbers, dates of birth, and bank routing
information, among other things. Despite GSA's effort to secure
that security access breach, other breaches have since
occurred.
The Army childcare subsidy program was intended to be
included as a part of the transfer of GSA's financial
management line of business to the U.S. Department of
Agriculture. As of July 31, the planned transfer of the program
to the Department of Agriculture has been placed on hold.
The OIG makes two recommendations in its report. First,
assuming that Army decides to keep GSA in charge of this
program, we recommend that GSA work with the Army to form a
plan to eliminate the backlog, achieve customer service
timelines that are satisfactory to the Army, and ensure the
security of Army families' sensitive information.
We also recommend that to avoid yet further disruption to
Army families in the event this program is transferred
elsewhere, GSA should obtain Army agreement and the
transferee's agreement on conditions for program transfer.
Thank you for the opportunity to testify about this matter
and for the committee's support of inspectors general. I ask
that my testimony and the OIG's report be made part of this
record. And I would be happy to take any questions the
committee may have.
Chairman Chaffetz. Thank you. The entire written statement
and record will be made part of the record.
[Prepared statement of Ms. Ochoa follows:]
[For complete submitted testimony, please see the following
website: https://oversight.house.gov/hearing/gsa-army-fee-
assistance]
Chairman Chaffetz. Ms. Hoehne, you're now recognized for 5
minutes.
STATEMENT OF STEPHANIE L. HOEHNE
Ms. Hoehne. Good morning, Chairman Chaffetz, Mr. Lieu, and
other distinguished members of the committee.
I'm Stephanie Hoehne, the director of Installation
Management Command's G9, Family Morale, Welfare, and
Recreation. The Army's FMWR Program operates and is responsible
for about $2.4 billion in programs across the Army, with more
than 25,000 employees worldwide.
I've been working in government service for over 37 years,
the first almost 27, in uniform, the last 10, as an Army senior
executive. Thank you for your invitation to appear and explain
how we plan to restore the Army's Fee Assistance Program and
regain the confidence of our Army families and their childcare
providers.
As you noted, sir, Army families rely on quality childcare
as a part of their support network. It is a critical enabler
for sustained readiness. The Army provides more than 200
childcare centers on installations and provides fee assistance
for families who do not have access to on-post childcare
facilities. The Army Fee Assistance Program pays community
providers the difference between their rates and what would be
charged at an on-post facility.
From August to October 2014, as a cost-saving measure, the
Army transferred administration of all of the Army Fee
Assistance Programs to GSA. We expected to save $4 to $5
million in overhead administrative costs while keeping the same
level of service. It was a logical choice at the time given the
fiscal constraints we were under. However, as a customer
service organization charged with taking care of soldiers and
families in a timely and responsive manner, we did not
adequately assess the risk involved, nor did we take effective
mitigation measures fast enough to ensure we provided the level
of service our families deserve. In this, we let our families
down, and we violated our own culture of customer service.
In November of 2014, a month after we initiated the
transfer, we became aware of late payments. But it was not
until February that we truly understood the magnitude of the
problem. We should have had better control measures to act
sooner. Since February, we've undertaken a number of steps to
improve the backlog in the service. And we've provided
additional funding, more staffing, more oversight, improved
automation of the application process.
We actually began to see reductions in the backlog. But
after the release of the GSA IG management alert report,
detailing the PII problems at the end of April, the backlog
returned. And in May and June, it continued to grow. We set up
a link on our Web site notifying parents and providers who were
expecting delays or problems with applications to let us know.
And we have directly engaged and resolved hundreds of issues.
Throughout this entire period, we have been working side by
side with GSA. Last month, we once again began to see a
reduction in backlog as we continue to seek more process
improvements. Close supervision and oversight of GSA
performance is ongoing. And we will continue to deploy a
subject matter expert weekly to ensure that they make progress.
The Army can and will do better. While we continue to work
with GSA to reduce the backlog by December, we expect the
program to be at a sustainable level. We've learned some
valuable lessons throughout this process. We've developed
improved metrics, tighter management controls, clearer
communication to our soldiers and families, and are in the
process of streamlining the entire program. We are also in the
process of transitioning the program to a contractor who has
demonstrated the capability to handle it.
This issue is personal to me. As a career soldier, one of
my greatest stressors throughout my career was finding and
keeping reliable childcare every time we moved. I appreciate
what our families are facing and am personally committed to
fixing the Fee Assistance Program as soon as possible. Thank
you again for this invitation. And I look forward to your
questions.
Chairman Chaffetz. Thank you.
[Prepared statement of Ms. Hoehne follows:]
[For complete submitted testimony, please see the following
website: https://oversight.house.gov/hearing/gsa-army-fee-
assistance]
Chairman Chaffetz. Mr. Badorrek, you're now recognized for
5 minutes.
STATEMENT OF GERARD BADORREK
Mr. Badorrek. Thank you. Good morning, Chairman Chaffetz,
Mr. Lieu, and members of the committee. My name is Gerard
Badorrek. And I am the chief financial officer of the General
Services Administration.
Chairman Chaffetz. Could you move that microphone just a
bit closer? It's not picking up as much as we want it to.
Mr. Badorrek. My name is Gerard Badorrek. And I'm the chief
financial officer of the General Services Administration. I
have been GSA's chief financial officer since December 29,
2014. Before coming to GSA, I spent nearly 30 years in the
private sector at companies such as MCI and Xerox.
As you are aware, GSA has been delivering Army Fee
Assistance financial services for more than 10 years. And last
year, GSA significantly expanded its role. GSA went from
managing the childcare program for 200 Army families to over
9,000 families and from 46 childcare providers to over 6,000.
Unfortunately, GSA was not adequately prepared and encountered
major challenges at the outset. Simply put, GSA failed in
providing the kind of service and level of service that Army
families deserve.
GSA shares the committee's concern for the welfare of our
military families and understands it is critically important
that we improve the operations of this program. That's why on
behalf of the GSA's entire leadership team, I want to apologize
to the two families represented here today and all of the Army
families who have suffered frustrations and financial
hardships. Our Army families deserve better. And we are
committed to getting this program on the right track.
I would like to thank GSA's Office of the Inspector General
for its assistance. We appreciate the inspector general's
partnership in evaluating this program and providing
recommendations to help us address the significant challenges
that GSA has faced in this program. I became aware of the
problems with the program shortly after starting at GSA. Due to
weak planning and a poor transition from the prior vendor,
there was already a large backlog by January 2015.
After my initial assessment, I believed there were three
key challenges that we needed to address immediately.
Complexity and a lack of clarity in the family application
process, an inadequate IT system, and lack of capacity needed
to keep up with applications resulting from serious
understaffing and associated productivity challenges.
GSA made changes to our childcare Web site immediately to
make the application process clearer and has worked with the
Army to streamline and simplify the application payment
processes. We've implemented an appropriate IT solution for
application processing. And we've worked to address staffing
shortages. We've also implemented process changes to improve
productivity and are working to make the program more
transparent.
Unfortunately, because of the size of the backlog already
in place and the time needed to make some of these changes, the
turnaround is taking longer to realize than I would have liked.
I understand that our overall backlog of actions and their
impact on families is truly unacceptable and we have serious
work to do. GSA will continue to work diligently to move
applicants through the entire process so the families get the
service they deserve. We are striving every day to increase the
number of phone calls answered, invoices paid, and applications
completed, and our efforts to increase staffing are beginning
to convey positive results.
GSA has implemented a path forward that addresses our
flawed assumptions regarding the resources necessary to handle
a program of this size and scope. We will continue to augment
and adjust resources as appropriate throughout the program to
continue to progress in eliminating backlogged applications. We
have developed metrics and bench marks to get us to a steady
state by the end of the calendar year. We at GSA----
Mr. Lynch. Mr. Badorrek, could you move that microphone
closer to you? I'm having a really hard time hearing you.
Chairman Chaffetz. You can straighten it out and bring it
closer. There you go.
Mr. Badorrek. All right. I'm about to end. Do you want me
to finish?
Chairman Chaffetz. Just keep going where you are.
Mr. Badorrek. Okay. Okay. I understand that our overall
backlog of actions and their impact on families is unacceptable
and we have serious work to do. GSA will continue to work
diligently to move applicants through the entire process so the
families get the service they deserve.
We are striving every day to increase the number of phone
calls answered, invoices paid, and applications completed. And
our efforts to increase staffing are beginning to convey
positive results. GSA has implemented a path forward that
addresses our flawed assumptions regarding the resources
necessary.
We will continue to augment and adjust resources as
appropriate throughout the program to continue to progress in
eliminating backlogged applications. We have developed metrics
and benchmarks to get us to steady state by the end of the
calendar year. We at GSA share your dismay at the continued
application and payment backlog that has caused hardship for
our men and women in uniform and their families.
Again, I want to apologize on behalf of GSA. Army families
deserve better. GSA is committed to staying the course of our
corrective actions and ensuring this program is put on track.
GSA appreciates your interest in and oversight of this
important program. And I'll be happy to answer any of your
questions.
Chairman Chaffetz. Thank you.
Chairman Chaffetz. I now recognize myself for 5 minutes.
Mr. Badorrek, how many voicemails were destroyed?
Mr. Badorrek. First of all, let me say that voicemails
should not be destroyed.
Chairman Chaffetz. But they were.
Mr. Badorrek. There were 4,000 reported by the IG. Let me
tell you what----
Chairman Chaffetz. Okay. So 4,000. How many emails were
destroyed?
Mr. Badorrek. I do not know.
Chairman Chaffetz. There were thousands of them
potentially, correct?
Mr. Badorrek. I believe we have processed, that have all
the applications that are there. I do not----
Chairman Chaffetz. The IG found that there were emails that
were destroyed, simply deleted. Is that your understanding, yes
or no?
Mr. Badorrek. I do not believe that any----
Chairman Chaffetz. Ms. Ochoa, did they destroy emails? Use
your microphone. Move it close. Push the button.
Ms. Ochoa. Yes. The IG found that emails and voicemails
were deleted.
Chairman Chaffetz. How many emails were destroyed?
Ms. Ochoa. We do not have that number. And I don't know if
GSA has the number.
Chairman Chaffetz. Mr. Badorrek, do you believe her? Were
emails destroyed?
Mr. Badorrek. I do not know if emails were destroyed. They
should not have been destroyed if they were. They certainly
should not have been destroyed until we had processed the
applications.
Chairman Chaffetz. We tend to believe the inspector general
more than we believe you at this point.
Mr. Badorrek. I understand.
Chairman Chaffetz. Do you believe that an email or a
voicemail is a Federal record?
Mr. Badorrek. Yes. They should not be destroyed.
Chairman Chaffetz. If it is a Federal record, the Federal
law requires that the head of the Federal agency to notify the
archivist if they are improperly destroyed. Did the GSA notify
the archivist that the records were destroyed?
Mr. Badorrek. No. We did not.
Chairman Chaffetz. Why not?
Mr. Badorrek. I just learned that the voicemails were
destroyed. We have records----
Chairman Chaffetz. When did you learn that? When did you
learn that?
Mr. Badorrek. I learned it as part of the IG report.
Chairman Chaffetz. Which was issued when?
Mr. Badorrek. Issued this week.
Chairman Chaffetz. Was it in a previous report? Ms. Ochoa?
Ms. Ochoa. I think the management alert addressed the
backlogs and the sensitive information breach and not the
deletions and purging of voicemails and emails.
Chairman Chaffetz. Ms. Hoehne, how do you rate the Army's
oversight of the transition? If you gave it a letter grade,
what would you give it?
Ms. Hoehne. Sir, at this point, I would give it a D.
Chairman Chaffetz. So what are you going to do to make it
right?
Ms. Hoehne. Sir, we've put in a number of oversight
metrics.
Chairman Chaffetz. Okay. Oversight metrics. I'm talking to
Captain Dyches and Ms. Hensley here. What are you going to do
to make their life right?
Ms. Hoehne. What we have done so far, sir, is several
critical things. We have identified some things we can do
quickly to speed up the application process for families and--
--
Chairman Chaffetz. Okay. They already had an application
and you failed, you failed to have it processed. I'm talking
about the thousands of Army families, men and women, who have
got young children, these two women have two 2 year-olds, what
are you going to do to make their life right?
Ms. Hoehne. Sir, we're working to speed up the process----
Chairman Chaffetz. That ain't good enough.
Ms. Hoehne. We are also working to move the entire program
back where it belongs.
Chairman Chaffetz. Which is where?
Ms. Hoehne. To a contractor who has experience and knows
how to do it.
Chairman Chaffetz. I still would love at some point an
answer as to what you're going to do to rectify the families
who--you've destroyed credit ratings, you've destroyed
families. Some people are filing, we heard testimony that
they're filing bankruptcy.
Ms. Hoehne. Yes, sir.
Chairman Chaffetz. We'll need to come back to that in
greater detail. I still don't understand why Child Care Aware,
which could operate with less than 40 people, you throw 184
contractors at it, they still can't get it done. And the answer
is well, we're going to pour more people at that problem. It is
pretty stunning that we get to that.
We were told by multiple sources that the Army may have
invested $3 million in developing a software used by the
previous providers. Is that true?
Ms. Hoehne. Sir, I don't have----
Mr. Chaffetz. How much money did you spend of the software?
Ms. Hoehne. My understanding is yes, we did invest in
providing a software capability for the previous provider.
Chairman Chaffetz. How much money was that?
Ms. Hoehne. Sir, I don't have that answer----
Chairman Chaffetz. Was it $3 million?
Ms. Hoehne. Sir, I don't know. I'll have to take that for
the record.
Chairman Chaffetz. And you'll get that back to us?
Ms. Hoehne. Yes, sir.
Chairman Chaffetz. My understanding is that--when did you
first--when did you read the--the GSA inspector general issued
a report in April of 2015. When did you read that?
Ms. Hoehne. Sir, I read the initial management report
within the week that it was issued.
Chairman Chaffetz. You told our, in a bipartisan way, in
our staff meeting, during an August 18 briefing, you told the
committee staff that you admitted that you didn't read the
April 2015 IG report. Is that true?
Ms. Hoehne. Sir, I misunderstood the question at the time.
I realized that was a management alert. I did not realize that
they were referring to that as the IG report. I had read the
management alert.
Chairman Chaffetz. From the inspector general, correct?
Ms. Hoehne. From the inspector general. However, I was
thinking there was a follow-on report that I had not gotten my
hands on yet, not realizing----
Chairman Chaffetz. So you said that you read it within the
week. What did you do?
Ms. Hoehne. We were already in the process of taking
corrective action, sir.
Chairman Chaffetz. And what the IG found, correct, Ms.
Ochoa, what happened in the meantime? What happened to the
backlog?
Ms. Ochoa. The backlog continued to increase while we were
evaluating----
Chairman Chaffetz. It doubled. It doubled. And you're here
to tell us, you have the gall to tell us that you're actually
reducing the backlog after it more than doubled? What's the
backlog now?
Ms. Hoehne. Sir, as we measure the backlog, it is 6,000
family actions and 9,100 unpaid invoices to providers.
Chairman Chaffetz. And we have at least 4,000 emails or
voicemails destroyed and an untold number of emails that were
destroyed. I think the seminal question, one of the big
questions we have for you, how are you going to make Captain
Dyches' life and Ms. Hensley's life and the thousands of other
Army families, what are you going to do to make them whole?
Ms. Hoehne. Sir, one of the things that we've done is
alerted Army Emergency Relief. And they are mobilizing to
provide financial assistance to families that are being
adversely affected by this situation.
Chairman Chaffetz. If you're affected by this, when do you
expect to hear from them?
Ms. Hoehne. They have put out the alert to all of the
installations, their offices at all of the installations. And
we are putting the word out through the chain of command, as
well as posting on our Web site that families that are
suffering financially as a result of this situation are
eligible for help from Army Emergency Relief.
Chairman Chaffetz. Captain Dyches, Ms. Hensley, what have
you heard from the United States Army?
Ms. Dyches. Sir, I have not gotten that notification from
that channel. My own command offered that to me when they
learned of our issues and offered emergency, Army Emergency
Relief to us. However, it seems like borrowing money that
should already be there. Because you do have to pay that back.
It's you know, it's a short-term loan. So other soldiers who
might be in more need might need that money instead of us.
Chairman Chaffetz. Ms. Hensley, what has the Army done to
help you?
Ms. Hensley. The same as Captain Dyches over here. We never
got any of that. His commander said that they could help us.
But, once again, you borrow money, you're still going to have
to pay that back so.
Chairman Chaffetz. Thank you. My time has expired. I'll now
recognize Mr. Lieu for 5 minutes.
Mr. Lieu. Thank you, Mr. Chair. According to the Army Fee
Assistance Family Handbook, this childcare program is designed
to provide, ``soldiers and families childcare services and a
quality of life that are commensurate with their service and
sacrifice.'' I think we can all agree that the level of service
provided by the Army and GSA has fallen far short of that
standard.
Ms. Ochoa, according to your April report, the GSA had
accumulated by January 2015 a significant backlog of over
11,500 childcare subsidy actionable items awaiting processing.
That number included unanswered phone calls and emails,
unprocessed applications. But it didn't include unpaid
invoices, correct?
Ms. Ochoa. At the time, GSA was not keeping track of the
unpaid invoices or keeping account of them and they did not
inform us that they had unpaid invoices.
Mr. Lieu. When you add in the unpaid invoices, your report
found that, as of July 31, the number was more than 9,100
unpaid invoices, in addition to the thousands of other
childcare actions not taken, correct?
Ms. Ochoa. Correct.
Mr. Lieu. Mr. Badorrek, would you agree that those levels
are not acceptable?
Mr. Badorrek. Absolutely. They are unacceptable.
Mr. Lieu. Now----
Mr. Badorrek. Yes, they are not acceptable.
Mr. Lieu. Okay. Thank you. Now, Ms. Ochoa, you also note in
your report that even though GSA took all these actions between
January and July, the backlog actually continued to grow. And
that by July 31, had more than doubled from its level in
January to nearly 26,000 unprocessed actions, is that correct?
Ms. Ochoa. That's correct.
Mr. Lieu. Okay. So, Ms. Hoehne, I do commend you for your
military service and your lengthy Federal service. You state in
your statement that you have confidence that you can get this
program basically back on track by the end of this year. What
gives you that confidence? If the backlog has actually
continued to grow, why do you have any confidence at all in
what GSA has done or can do?
Ms. Hoehne. Sir, two things, two things generate a certain
level of confidence. One is that GSA has successfully
identified with accuracy the number of actions required. They
have identified what they are capable of doing. It is after an
assessment of this that we determined to initiate a bridge
contract to take the pressure of new actions off of GSA and let
them focus exclusively on working the backlog and then do a
deliberate transition of actions over to a new contract.
Mr. Lieu. Thank you. Ms. Ochoa, in your report, you state
that GSA should establish a plan with performance indicators,
benchmarks, and implementation strategies. I thank you for that
recommendation.
And, Mr. Badorrek, will your office commit today to
providing the committee a plan consistent with the
recommendations in the IG's later report to this committee
within a week?
Mr. Badorrek. Yes. We will.
Mr. Lieu. And, Ms. Hoehne, will your office commit to
working with the GSA to get us that written action plan also
within a week?
Ms. Hoehne. Yes, sir.
Mr. Lieu. Now, let me ask you this question, why doesn't
the Army just switch back to CCA? It was totally fine. It's
working for the other services. Why don't you just do that?
Ms. Hoehne. Sir, honestly, the backlog is in such a state
of disrepair at this point that I don't think a contractor
would be willing to take it on. In addition, we have been
talking with Child Care Aware and they need time to put the
staff in place to be able to do it right and----
Mr. Lieu. What about simply just paying 50 percent of all
of these invoices, just so the Army and military families have
something to rely on, and then do the rest later? Why can't we
just do that?
Ms. Hoehne. Sir, what we have done to speed up the payment
of invoices, we found that a large part of the delay was due to
a discrepancy between the invoiced amount and what GSA had in
their records as what the provider was supposed to be paid.
This could be due to a child aging up into a different
category. It could be due to numbers being transposed on an
invoice. We have directed them to pay the invoice.
Mr. Lieu. Thank you. I just want you to consider making
some partial payments immediately.
Ms. Hoehne. We have essentially directed them to go ahead
and pay the invoice and we will work out the discrepancies.
Because the discrepancies, there's a small amount of money,
it's important to not reach into the family's pocket the way
that they have had.
Mr. Lieu. Thank you. Mr. Badorrek, has anyone at GSA been
disciplined for deleting emails and voicemails?
Mr. Badorrek. No one has been disciplined.
Mr. Lieu. Can you push the button and say that again?
Mr. Badorrek. No one has been disciplined.
Mr. Lieu. Okay. Can GSA look at disciplining people for
deleting voicemails and emails?
Mr. Badorrek. Yes. We will look at that. For the record I
would like to----
Mr. Lieu. And those voicemails and emails may have
contained whistleblower information or information about fraud,
waste, and abuse, and you wouldn't know that, correct?
Mr. Badorrek. I would not know that.
Mr. Lieu. Okay. And my final question, Ms. Hoehne, has
anyone been disciplined at Army Installation Management Command
for this fiasco?
Ms. Hoehne. No, sir.
Mr. Lieu. Could you look into that?
Ms. Hoehne. Yes, sir. We will look for culpability.
Mr. Lieu. Thank you.
Chairman Chaffetz. I'll now recognize the gentleman from
Florida, Mr. Mica, for 5 minutes.
Mr. Mica. Well, as I complete my more than two decades'
service on this panel, every time you attend, you say it just
can't get any worse, that agencies really can't screw things up
in a manner that could be more devastating.
Sounds like thousands of military families have been left
in chaos for their childcare. Is that pretty much the
situation? Our two service women, you're left in chaos?
Ms. Hensley. Yes.
Mr. Mica. Ma'am?
Ms. Dyches. Yes.
Mr. Mica. Okay. First of all, I disagree with my colleague.
I respect him. But I don't think we should pay 50 percent of
the bills. I think you should pay the damn bills, pay the 9,000
invoices. And that can be done. I'll send my staff down there
to help you do it if you can't do it. And you can't come here
and testify and tell us that you can't find a contractor that
can pay the bills. That's baloney.
Is there any problem with them not having contract
authority to do this? Our inspector general, do they have
contract authority to pay the bills? If you pay a bill and it
is a bill that is fraudulent or not proper, aren't there means
to recover that money?
Ms. Hoehne. Yes, sir.
Mr. Mica. Isn't it a crime if you defraud the United States
Government?
Ms. Hoehne. Yes, sir.
Mr. Mica. Okay. Pay the bill. This is shameful. What a
nightmare for our military families.
Again, thank you, Mr. Chairman, for, you know, this isn't
the Iran deal. This isn't Watergate. It isn't an IRS scandal.
But this is a horrible scandal for our military families. The
administrative costs, you're up to 10,000 people, the
administrative costs are about $840 I figure, it's $8.4 million
for administration, is that right?
Ms. Hoehne. Yes, sir, at this point.
Mr. Mica. Approximately.
Ms. Hoehne. Yes, sir.
Mr. Mica. Yeah. And you can't find somebody who can process
this? First of all, I think you need to go back and just do a
chart, what you're entitled to. If you've got kids and you're
in the military and you put them in daycare, if it's on base or
off base, here's the chart, here's your rank, here's what you
get, and get out of the billing system and all this paperwork.
You've created a monster, GSA.
My own report here is you didn't know about this just last
year. It says Army and GSA began internal discussions in 2011.
You knew this was coming. You weren't there, but they knew this
was coming. Is that correct?
Mr. Badorrek. Yes. They knew it was coming.
Mr. Mica. Okay. And you couldn't get it right? You couldn't
get it right? Again, you can't find a contractor? Who in GSA is
responsible for this program? What person is responsible?
Mr. Badorrek. I am responsible for the program.
Mr. Mica. You're responsible?
Mr. Badorrek. Yes.
Mr. Mica. You've been responsible during the period of the
chaos?
Mr. Badorrek. No. I have not been responsible for the
transition----
Mr. Mica. Okay. Have you been rewarded? Have you gotten a
bonus the last year?
Mr. Badorrek. No. I've only been with the Federal
Government since January----
Mr. Mica. Okay. And who is working with you? I want a list
of the GSA people working on this. I found in the past they end
up getting bonuses. They do lousy work and they get bonuses. I
want you to submit within the required days to this committee
who is working on it specifically, what their pay scale is, and
if they got a bonus during this period. Can you do that?
Mr. Badorrek. I can do that.
Mr. Mica. And who is in charge----
Chairman Chaffetz. When is a reasonable date to have that?
Mr. Mica. I want it within 30 days or I'll ask for your
resignation. I want it within 30 days. You give me a list and I
want a list of the people who have, their pay, and if they've
gotten any bonuses if they've been involved in this program.
I believe that we should look at maybe going to a direct
grant, we need to solve this, something through pay or scale
that should be set up. This is a nightmare, paperwork,
bureaucracy, and contractors, millions of dollars more that
we've spent. And we have only 10,000 families in this program,
is that correct? Am I wrong.
Mr. Badorrek. Yes.
Ms. Hoehne. Yes, sir----
Mr. Mica. Ten thousand, and you can't find a vendor that
can handle 10,000 applications and make payments to vendors?
There's now 5,000 vendors I understand that are eligible, is
that correct? Approximately? Anybody know? Do you know?
Ms. Hoehne. Yes, sir. Yes, sir.
Mr. Mica. I'm just asking. Again, I have never seen
anything so screwed up and intended to do well for our
military, transferred to GSA with plenty of notice, and then
this results. This is, Mr. Chairman and my fellow members, this
is shameful. I yield back.
Chairman Chaffetz. Thank the gentleman.
Now recognize the gentleman from Massachusetts, Mr. Lynch,
for 5 minutes.
Mr. Lynch. Thank you, Mr. Chairman. And I agree with the
previous speaker. This is shameful that this has happened.
First of all, I want to thank you all for testifying. Thank
you for coming before this committee to straighten out this
problem. I want to thank you for your service to our country.
And, Ms. Hensley, your family's service to our country. You
would think that based on the importance of the decision that
your families have made, Captain Dyches, and, Ms. Hensley, that
to put on that uniform on behalf of this country, that we would
meet our obligations to make sure that your families have the
support in order to allow you to undertake that serious
obligation. And it is nothing short of infuriating that you had
to go through this.
Let me just try to get at the problem. Ms. Ochoa, you said
in your testimony that this transfer of responsibility from the
previous company, CCA, Child Care Aware, they had the contract
previously for child care?
Ms. Ochoa. Yes. That's my understanding.
Mr. Lynch. Okay. Now, this move to give it to--give the
responsibility now to GSA was done as a cost-saving measure. Is
that correct?
Ms. Hoehne. Yes, sir.
Mr. Lynch. Ms. Hoehne, it might have been you that said
that. I'm sorry.
Ms. Hoehne. Yes, sir.
Mr. Lynch. So as I understand, GSA said they could do that
job for half the money. Is that right? It was $8 million and
they said: We can do it for $4 million?
Ms. Hoehne. Yes, sir.
Mr. Lynch. How's that worked out?
Ms. Hoehne. We were aware at the time that there was a
fairly significant amount of indirect cost in the contract.
Mr. Lynch. Yeah.
Ms. Hoehne. And that cost was not being charged with GSA.
Mr. Lynch. I understand that. But could you tell me how
that's worked out?
Ms. Hoehne. Sir, it hasn't worked out.
Mr. Lynch. It has not worked out. That's what I'm getting
at. Okay. So they said they were going to do it for $4 million,
what has it cost them so far?
Ms. Hoehne. Right now we're at $8.4 million total.
Mr. Lynch. So they didn't save money, it actually cost
$400,000 more----
Ms. Hoehne. Yes, sir.
Mr. Lynch. --than the previous contractor.
Captain, Dyches, Ms. Hensley, did you have any contact with
this CCA? Were your kids in that program?
Ms. Dyches. Yes. Yes, Mr. Congressman. I absolutely did. It
was operating smoothly and everything was----
Mr. Lynch. Was it? Yeah, tell me about that. How did they
handle the responsibilities that they had to your kids and your
family?
Ms. Dyches. We all had one person that we answered to. So
there was one individual taking care of a number of families.
So I only had one number to call. That woman took care of not
only placing my child into a child care because it's rather
difficult to find in the--you know, the district where the
people that actually meet the requirements are located. So she
gave me lists of people in, you know, various areas on my way
to work, you know, that were convenient to me and my husband.
She walked--she held our hand through the entire process.
And then we actually had to switch child care providers
because the one that I was using was--ended up to be far away.
We were new to the area. So whenever we needed to switch over,
that was when I was informed that they no longer had that
services. You know, they couldn't help us, and so I was just
kind of left on my own to find these people. And I luckily did
find a woman that has been, you know, very, very great for our
family, a really good fit. But that service is no longer there,
and, you know, starting in October it went downhill.
Mr. Lynch. Okay. Ms. Hensley, have you had--did you have
dealings with Child Care Aware, the previous contractor----
Ms. Hensley. So, our story's a little bit unique. We were--
at the time when we had NACCRRA, we were about 2 days away from
getting the documents pulled through stating that, you know,
you're going to get your--you know, everything's going to be
fine. We actually never got any emails or anything stating that
the switch was going to occur.
Mr. Lynch. Yeah. I--okay. Go ahead. I'm sorry.
Ms. Hensley. So overnight when we went back on to the
NACCRRA Web site to finish filling out the paperwork and stuff,
they said that it was no longer there.
Mr. Lynch. Okay.
Ms. Hensley. So at that point we had to start from scratch
all over again. So----
Mr. Lynch. Okay. All right. I get it.
Ms. Ochoa, wouldn't it make sense if this other company,
Child Care Aware--and, by the way, you explained that GSA was
handling 200 families, and then we gave them responsibility--
and those 200 families were in Federal centers, which is much
more manageable.
Ms. Ochoa. That's correct.
Mr. Lynch. And then we turn around and give them 9,000
families and 5,000 individual providers to deal with. And
basically, Ms. Hoehne, and Ms. Ochoa, you both testified that
things when right downhill immediately after that. The list
started getting longer and we had all kinds of problems.
Wouldn't it make sense, I mean, the other company was doing
it well, doing it cheaper, actually doing the job on behalf of
Captain Dyches' and Ms. Hensley's families and others, wouldn't
it make sense just if it's not--I mean, what--it didn't
accomplish the savings. We're paying more for worse services.
Wouldn't it make sense to go back to this--and I'm not--you
know, I'm not advocating on behalf of CCA, this Child Care
Aware program necessarily. They're not in my district. I don't
have any interest in them. But, by God, they were doing the
job. Why did we remove them?
Ms. Hoehne. Sir, at the time there was an opportunity to
save money we thought----
Mr. Lynch. Yeah.
Ms. Hoehne. --and it seemed like a logical course of
action. We have recognized the error of our ways and we are
going back to a contractor who has experience and can provide
the quality of service our families deserve.
Mr. Lynch. All right. I've gone over my time. Mr. Chairman,
I thank you for the indulgence.
Chairman Chaffetz. Will the gentleman before that? Is that
going to be a competitive bid or a sole source contract?
Ms. Hoehne. Sir, initially for this bridge we're going to
do a sole source.
Chairman Chaffetz. Sounds like you've already made the
decision. Do you know who it is? Do you know who it is?
Ms. Hoehne. Yes, sir.
Chairman Chaffetz. Who is it going to be?
Ms. Hoehne. Child Care Aware.
Chairman Chaffetz. So you're going to go back to Child Care
Aware.
Ms. Hoehne. Yes, sir.
Chairman Chaffetz. If you can provide the details of that,
we would be very appreciative.
Ms. Hoehne. Yes, sir. We're still working it out. We
haven't--they have to get their staff on board and then we'll
be in a position to let the contract, sir.
Chairman Chaffetz. Thank you.
Mr. Lynch. Thank you, Mr. Chairman.
Chairman Chaffetz. Thank the gentleman.
I now recognize the gentleman from Georgia, Mr. Hice, for 5
minutes.
Mr. Hice. Thank you, Mr. Chairman.
Ms. Hoehne, I want to go back to what you were just now
talking about because it seems like we may be finally on a path
to correcting all of this. So you said you're going back to
Child Care Aware?
Ms. Hoehne. Yes, sir.
Mr. Hice. Okay. When will that be made public and when will
Captain Dyches and the Hensley family and others be aware that
relief is on the way?
Ms. Hoehne. Sir, we're in conversation right now. They are
beginning to pull staff in so that they will be in a position
to take over the contract.
Mr. Hice. In conversation with who?
Ms. Hoehne. Yes, sir.
Mr. Hice. With who?
Ms. Hoehne. With Child Care Aware.
Mr. Hice. Okay.
Ms. Hoehne. We've learned a lot of lessons in this, and
this is going to be a very deliberate event. So it will be a
transition where they initially take on some responsibility.
And then also, if I may, I will take that question for the
record and give you our timeline.
Mr. Hice. Yeah. I want timeframes. We've got families that
are suffering. We need to know when is this transition going to
be completed, what are the benchmarks that you're relying upon
in order to meet the transition and the timeframes so that we
don't have further bankruptcies and families suffering. It's
inexcusable what's taking place.
Now you said just a little while ago that no other
contractor would take this scenario on right now because it's
in such disrepair, and yet CCA is going to take it back. Has
that been agreed to?
Ms. Hoehne. Yes, sir. They are agreeing to help us. They
are agreeing to a transition, but they are not taking the whole
contract on all at once. They're----
Mr. Hice. All right. So what is the plan? What part of the
contract are they taking, and what's going to happen to those
families that are not part of the immediate contract?
Ms. Hoehne. GSA is still being held accountable for fixing
the backlog and taking care of families as quickly as possible.
At the same time we will start----
Mr. Hice. That does not sound possible, Mr. Badorrek. This
thing has been messed up from the get-go and now all of a
sudden you're supposed to correct this during a transition
while it's going back to CCA. That doesn't sound like it's a
possible task. You guys have messed this thing up pretty
thoroughly.
Mr. Badorrek. The----
Mr. Hice. Turn your mic on, please.
Mr. Badorrek. Okay. The move to this contractor for
incoming applications will help us to get through the backlog.
As we have worked through the backlog, we have more work coming
in. We have 24,000 transactions coming in a month. That will
relieve the pressure and give us a higher likelihood of
success.
Mr. Hice. All right. How long is this transition going to
take? This still sounds like we've got a mess. We've got so-
called a solution on the table. But this sounds to me like it's
still going to take forever to get corrected.
Ms. Hoehne. Sir, we're in the process of signing an
extension agreement with GSA to December to get the backlog
under control.
Mr. Hice. Through December, you said?
Ms. Hoehne. Yes, sir. Ideal circumstances with not having
to handle the new transactions and being able to focus
exclusively on the backlog, that enables them to double the
volume of actions that they could handle. Working the backlog,
they should be at a sustainable rate by December.
However, in consultation with Child Care Aware, we are
going to continually assess their ability to take on more
responsibility, and if they can take on more sooner, we will
accelerate the transition.
Mr. Hice. ``Sooner'' being what?
Ms. Hoehne. Sir, I can't answer that question yet because
we're at the leading edge of the consultation with what they
can do as they bring their staff on. The concept is----
Mr. Hice. Do they not already have staff?
Ms. Hoehne. --initially take the new actions and take the
recertifications because that's a constant state thing, while
they work the backlog on paying providers. Then we can
coordinate payment of payment to providers of delayed invoices.
Mr. Hice. All right. I understand you're in conversation
with Child Care Aware. All right. So I'm not looking right now
for specifics. I want those specifics as soon as possible.
Ms. Hoehne. Yes, sir.
Mr. Hice. But generally, what kind of timeframe are we
looking at? We have families out here suffering. We don't need
to drag this thing out for months and months and months and
months. Generally speaking, what kind of timeframe are you
anticipating?
Ms. Hoehne. Sir, I am shooting for having this contract
fully transitioned to Child Care Aware by the end of December.
Mr. Hice. By the end of--so a year from now?
Ms. Hoehne. No, sir. By the end of this December.
Mr. Hice. Oh. All right. I though you said summer. So what
does January look like for these families?
Ms. Hoehne. If things go as planned, then they will be
under Child Care Aware, and they will be back to receiving the
level of service that they deserve.
Mr. Hice. How many families will be under Child Care Aware?
Ms. Hoehne. Sir, we have approximately----
Mr. Hice. I mean, percentage-wise.
Ms. Hoehne. --9,800 families in the program, and 9,800
families will be taken care of the way they ought to be taken
care of.
Mr. Hice. All right. So you are anticipating that come
January, this whole problem is going to be resolved.
Ms. Hoehne. That's my objective, sir.
Mr. Hice. Okay. That the whole problem will be resolved by
January. That's your objective.
Ms. Hoehne. Yes, sir.
Mr. Hice. Okay. So GSA is going to be out of this equation
entirely, and CCA will be 100 percent in control by your
objective----
Ms. Hoehne. Yes, sir.
Mr. Hice. --by January?
Ms. Hoehne. Yes, sir.
Mr. Hice. Okay. Ms. Ochoa, do you have any recommendations
at this point that you would lay on the table to make this
transition happen smoothly?
Ms. Ochoa. One of the things we did recommend to the----
Mr. Hice. Can't hear you.
Ms. Ochoa. One of the things that we did recommend in the
report is that in the event of a transfer of the program, which
it sounds like is in the works, GSA and the Army and the
transferee have to work closely to avoid any further disruption
to Army families. That's----
Mr. Hice. Yeah, that sounds good, but that's got to happen.
We have families suffering, and this has got to stop
immediately. And I look forward to getting your response on the
specifics of the timeline and the benchmarks, and I appreciate
that.
And I yield back, Mr. Chairman. Thank you.
Chairman Chaffetz. Thank the gentleman.
We'll go ahead and schedule a notice of hearing for January
2, sounds like. So we look forward to seeing you back.
I now recognize the gentleman from Virginia, Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
And congratulations to the U.S. Army and GSA for bringing
Democrats and Republicans together here in the Congress.
You know, listening to the story, our U.S. Army does such a
wonderful job. It runs overseas bases. It runs big bases like
Fort Belvoir in my district here at home. Millions of people
processed. We fight wars. We deploy troops. We engage in peace-
keeping missions. We run commissaries. But child care is beyond
us. And, relatively speaking, the numbers are small compared to
the other missions and tasks the Army and GSA face. And it
passes understanding how we could have arrived at this point.
Nobody obviously intended to do harm to the program, but
decisions were made that had consequences. Consequences on real
people. You're a parent, and you have to work, there is nothing
more sacred than the care of your child. And when you entrust
any entity, an individual caregiver or an institutional
caregiver, your child, we in the public sector have a sacred
obligation to do the very best we can for that child and that
family.
Ms. Hoehne, what in the world possessed us to decide to
change a program that was working and go with GSA? Why did we
decide that?
Ms. Hoehne. Sir, according to the documentation.
Mr. Connolly. I'm going to ask everyone to speak into the
mic like I'm doing. Because it's hard to hear you sometimes.
Thank you.
Ms. Hoehne. Yes, sir. According to the documentation at the
time the decision was made back in August of 2013, fiscal
pressures were causing the Army to look everywhere for ways to
gain efficiencies and save money.
Mr. Connolly. You though you'd save money.
Ms. Hoehne. Yes, sir.
Mr. Connolly. How'd that work out for us?
Ms. Hoehne. Not so good?
Mr. Connolly. How come?
Ms. Hoehne. We did not do our due diligence in inspecting
the capability of GSA to take on an expansion of the program.
We did not communicate effectively with each other. GSA didn't
let us know they weren't ready. We didn't go in and check and
make sure they were ready. And that put us on our back foot at
the outside of the program.
Mr. Connolly. Mr. Badorrek, so they didn't do their due
diligence, but GSA made a representation to the Army that it
was capable of undertaking this task. Is that correct?
Mr. Badorrek. That is correct.
Mr. Connolly. Speak in.
Mr. Badorrek. Yes. That is correct.
Mr. Connolly. And you got it wrong too.
Mr. Badorrek. GSA got it wrong, yes, absolutely.
Mr. Connolly. How did that happen?
Mr. Badorrek. GSA got it wrong.
Mr. Connolly. Again, I'm going to ask you to speak into the
mic. I can't hear you.
Mr. Badorrek. Okay. GSA underestimated the level of effort.
They looked at the level of effort it was taking to support
child care and families with the Federal day care centers. They
underestimated the effort it would take to support 6,000
providers. They underestimated the system needs and complexity
and the $4 million that we agreed to do with the Army was too
low.
Mr. Connolly. I'm focused on the backlog. I think I'm
correct that there's a backlog or was a backlog of about 9,000.
Is that correct?
Mr. Badorrek. The backlog of invoices or the backlog----
Mr. Connolly. Of invoices.
Mr. Badorrek. Yes, there's about 8,000----
Mr. Connolly. Eight-thousand. What's the average invoice
for?
Mr. Badorrek. Average invoice is a little over $300.
Mr. Connolly. Three hundred dollars. Is that the average
monthly cost to put a child in child care in the program?
Mr. Badorrek. It's per child, yes.
Mr. Connolly. Per child. Per month.
Mr. Badorrek. Yes.
Mr. Connolly. Per month. So, I don't know. What's the
salary, do you think, of the average client in the program?
Monthly salary that the U.S. Army pays?
Mr. Badorrek. I have no----
Mr. Connolly. Ms. Dyches, can you give us a round ballpark
figure? I mean, not necessarily yourself, but people you know.
Ms. Dyches. Ballpark figure, Mr. Congressman?
Mr. Connolly. Yeah. Are they making $30,000 a month.
Ms. Dyches. No.
Mr. Connolly. No, no. What are they making?
Ms. Dyches. Probably like two to three grand, sir.
Mr. Connolly. Two to three thousand?
Ms. Dyches. Yes, sir.
Mr. Connolly. So if I've got a--if I haven't been
reimbursed for my $300 monthly childcare, and maybe I have two
kids, so my cost is more than $300, from a cash flow point of
view for an active duty service member, that's a hardship.
Ms. Dyches. Yes. Definitely.
Mr. Connolly. Is GSA aware of the urgency of the need to
reimburse men and women in uniform for their childcare?
Mr. Badorrek. Yes, we are.
Mr. Connolly. So how in the world did you end up with a
backlog of at least 8,000?
Mr. Badorrek. We receive----
Mr. Connolly. Not enough people working at GSA?
Mr. Badorrek. We receive 12,000 invoices a month. We have
about 35 percent that error out for some kind of----
Mr. Connolly. I still can't hear you, Mr. Badorrek.
Mr. Badorrek. We receive 12,000 invoices a month. We have
roughly 30 percent, 35 percent that error out. I believe we are
too stringent in ensuring that the amounts were precise. We
have fixed that going forward.
Mr. Connolly. Well, it's commendable--it's obviously
commendable to verify so that we're not wasting taxpayer
dollars. But it's also critical that the families we're trying
to serve are served in a timely fashion so that they're not
experiencing a cash flow squeeze.
And one would think that would be a priority, both for the
Army and for GSA. But we're not talking about people who are,
you know, getting rich like Donald Trump in service to their
country. These are men and women who are making sacrifices for
their country at kind of modest compensation but who
nonetheless have family obligations that need to be met, and it
seems to me that in that sacred obligation we've got to kids,
to men and women in the uniform, we also have part of that, by
extension is, can they be reimbursed in a timely and efficient
manner. Would you not agree, Mr. Badorrek?
Mr. Badorrek. I agree.
Mr. Connolly. Thank you, Mr. Chairman.
The Chairman. Thank the gentleman.
I now recognize the gentleman from Iowa, Mr. Blum, for 5
minutes.
Mr. Blum. Thank you, Mr. Chairman. Thank you so much for
holding this most important hearing. And I'd also like to
welcome the panel. And for those of you that have served in the
military or are currently serving in the military, thank you
for your service to this great Nation of ours. Much
appreciated.
Mr. Badorrek, you're a former executive vice president of
Xerox. Is that correct?
Mr. Badorrek. Senior vice president, yes.
Mr. Blum. And you also have executive experience at, I
believe, Verizon and MCI?
Mr. Badorrek. Yes.
Mr. Blum. First of all, I'd like to say I'm glad you're
here. I'm a private sector myself, and I think we need more
private sector experience in the Federal Government, not less.
That being said, I'd like to ask you a few questions.
Did Xerox and did Verizon, did MCI take care of their
customers?
Mr. Badorrek. Yes, they I did.
Mr. Blum. I'd like to ask you, who is the customer of the
GSA?
Mr. Badorrek. The customer is the Army families.
Mr. Blum. Could you say it once again?
Mr. Badorrek. The Army families are the customers.
Mr. Blum. Do you think most people in the GSA understand
that? Do they understand who the customer is in this situation?
Mr. Badorrek. I believe so, but I don't know absolutely
know.
Mr. Blum. Mr. Badorrek, what would happen if Xerox or
Verizon, in the private sector, did not take care of their
customers? What would happen? What would happen to the company
and what would happen to the executives?
Mr. Badorrek. First, they would take action quickly to
remedy the problem.
Mr. Blum. And what would happen if they didn't? What if
they didn't take action quickly to take care of the customers?
What would happen? What would happen to Xerox?
Mr. Badorrek. If Xerox----
Mr. Blum. Yeah. You're a former senior vice president
there. Correct?
Mr. Badorrek. Yes.
Mr. Blum. You had a division that was not taking care of
their customers, what would you do?
Mr. Badorrek. Yeah. There would be focus. It would get
fixed, whether it was resources or the company did lose money,
they would get things in place to make the situation right.
Mr. Blum. And what would happen to the management?
Mr. Badorrek. The management----
Mr. Blum. Would they keep their jobs or they'd get bonuses?
Would they be terminated? What would happen?
Mr. Badorrek. If it was not working, they would certainly
not get bonuses. They would be required to fix the problem as
soon as they could. They could lose their job.
Mr. Blum. As a private sector person, Mr. Badorrek, what
I'm concerned about in the Federal Government is there's no
penalty for failure in Washington, D.C. No penalty for failure.
And you're a private sector guy. There is penalty for failure,
would you agree, in the private sector?
Mr. Badorrek. There is penalty for failure. In the private
sector, you can move much faster than in the government.
Mr. Blum. Why is that?
Mr. Badorrek. In the private sector, if you need to have
additional contractors in a call center, you can do that in a
week. In the public sector, you have to go obtain, get
additional funding, sign the contract, obtain a vendor
contract. They have to procure people. They have to go through
security clearance. The ability to move and make changes in the
government, for me, just coming out of the private sector, it's
taken longer than I'm used to.
Mr. Blum. In your opinion, Mr. Badorrek, would the Federal
Government be more effective and more responsive to our clients
if we implemented some of these private sector practices? Just
your opinion.
Mr. Badorrek. Yes.
Mr. Blum. It says in your testimony you were made aware of
a problem, this problem, on January 7 of 2015.
Mr. Badorrek. Yes.
Mr. Blum. What happened since then? You tell me how you
used your private sector experience to make sure this problem
got quickly resolved, as you just said it would be at Xerox?
Mr. Badorrek. First of all, the problem is not resolved.
The backlog's unacceptable. I apologize for that. GSA
apologizes for that. I can tell you what I did and some of the
struggles that we encountered. We received--I received a letter
from a family on January 7 expressing concern about the
operation and their application. I asked for some background
information on it. On the 19th of January, I flew to Kansas
City to look at the operation. On that day I put additional
focus and management on the project. Two weeks later I changed
the oversight of the organization, and we went to the Army for
additional funding.
Mr. Blum. Okay. We're 8 months later. Correct? The
problem's not taken care of. If this was Xerox, if this was
Verizon, would this problem have been taken care of by now?
Mr. Badorrek. I believe so.
Mr. Blum. Okay. Things need to change. Would you agree?
Mr. Badorrek. Yes.
Mr. Blum. I just want your honest opinion. Your honest
opinion on this next question. Give me your observations as a
private sector executive on the culture of the GSA. Is it a
customer-driven organization?
Mr. Badorrek. Yes. It is.
Mr. Blum. All evidence to the contrary in this situation,
would you agree?
Mr. Badorrek. In this situation, following the government
requirements to obtain the funding, to get the contract with
the vendor, to procure individuals to go through the clearance
process all took longer than I would have ever expected and
have ever experienced before.
Mr. Blum. And my time is expired. I'd just like to end by
saying I'm glad you're here, I'm glad you have private sector
experience. And please work hard to change this to a more
customer-driven government. Thank you very much.
I yield back, Mr. Chairman.
Chairman Chaffetz. I thank the gentleman from Iowa.
I now recognize Ms. Norton from the District of Columbia
for 5 minutes.
Ms. Norton. Thank you, Mr. Chairman.
Actually, Mr. Badorrek, I like the idea of the government
competing with the private sector for work, and we have
encouraged that in the government.
And this case, Ms. Hoehne, I certainly understand it. In
the face of the sequester and the cuts that preceded it, I'm
sure that there are agencies all over the government now
competing for work with the private sector. The difference of
course is that here we were dealing with children and with
members of the Armed Forces, where there's very special
obligation when either the private sector or the government
does the work.
First let me ask about the 200 that GSA had. Do they still
have 200 Army families under--where they're doing the work
for----
Mr. Badorrek. Yes. Yes, we kept the 200 and added the
roughly 9,000. That number is about 10,000 families now.
Ms. Norton. And you retained--are you going to retain the
200 afterwards, or are you going to give that work to the CCA?
Mr. Badorrek. That's up to the Army to decide.
Ms. Norton. Has the Army decided that issue?
Ms. Hoehne. No, ma'am, not at this point.
Ms. Norton. I think you said, Ms. Hoehne, that no
contractor would take this with this backlog. Does that mean
that the backlog has got to be taken care of before the work is
given to the new contractor?
Ms. Hoehne. Ma'am, we have to get the backlog to a
sustainable level.
Ms. Norton. So you're not going to give them the backlog.
You're going to give them a clean slate?
Ms. Hoehne. I'm going to transition it gradually in
manageable bites so that the new contractor is not overwhelmed
and we don't make a bad problem worse.
Ms. Norton. That's certainly a good idea. But what happened
was all of these--all of these families that they had--they had
200 families, presto they had 9,000, and there was no phasing
in of that work. So it would have been better to phase in that
work no matter who the contractor was, whether it was GSA or
any other contractor.
I understand that this matter was not rectified until it
came to the attention of the public through an NBC4
investigation here in the District of Columbia. Is that true?
Ms. Dyches. Yes, Congresswoman.
Ms. Norton. So it was uncovered by the press?
Ms. Dyches. Yes, Congresswoman.
Ms. Norton. Mr. Badorrek?
Mr. Badorrek. Yes. GSA reported the problem to the IG----
Ms. Norton. After or before----
Mr. Badorrek. In February of this year. When I came on
board on January, visited the operation, I knew we had a
problem that was disclosed to the IG. We asked them to----
Ms. Norton. I'm just trying to get the dates here. I mean,
you disclosed it----
Mr. Badorrek. Yes, in February.
Ms. Norton. So did you speak to the reporters from NBC4 who
made this a public matter about what GSA was going to do about
it, or did anyone at GSA say what it was going to do about it
at the time that it became a public matter?
Mr. Badorrek. I did not speak to them. Our public relations
organization did.
Ms. Norton. I'd like to ask you, Ms. Dyches, it sounds to
me that essentially without the subsidy you would be out of
pocket--or what did these families do? Did they somehow quickly
get somebody else to take care of a child? Have they lost
money? And can you calculate the amount of money you would
have--you have lost if you have lost any?
I mean, perhaps somebody had a relative, happened to have a
relative in this area. I don't know. But I'd like to know
whether you are out of pocket as a result of not getting the
subsidy.
Ms. Dyches. Yes, Congressman. We were out of pocket upwards
of $2,000 to $3,000 at one point. We have been--once the News
Channel 4 took over the issue and made it public, we were paid
the very next day. Our childcare provider was.
But, yes, if you don't have family in the area to help you
out with this, and, like I said, my husband and I are a dual
military couple, child care is a requirement. We can't just not
go to work. So--and also most military families are dislocated
from their family, their main--you know, their mothers, their
fathers. They have been relocated. So that is also not an
option for most military families to rely on mother-in-laws.
Ms. Norton. What was GSA's track record with 200 families?
And was any investigation done of that? I mean, we've--before
you get to triple your caseload, surely someone looked to see
what GSA had already done with 200 families committed to its
care.
Ms. Hoehne. Ma'am, the Army had had a 10-year relationship
with GSA supporting the 200 families with no problems. So we
had a good relationship with them as far as----
Ms. Norton. So the problem was with the scale and of course
with the anxiety GSA and other agencies are feeling to cut
costs.
So while I think it's inexcusable that these families were
left in this way, I do think that for the government, for we
who are in the government who are responsible for the
sequester, who are responsible for the cuts, to sit up here and
act as though GSA had all kinds of options and they just didn't
take the right one is not entirely fair. That's why I wanted to
bring that out.
I go back to my premise, though. We are dealing with, as
far as I'm concerned, the most precious people in our society.
The children would come first. Second would come their parents.
Because these are all volunteers taking care of us in the
United States.
Thank you.
Chairman Chaffetz. Thank the gentlewoman.
And before I recognize our next two Members of Congress, in
addition to Mr. Lieu and his service in the Air Force, these
next two Members of Congress have storied histories and service
to our country.
I'd like to recognize, and if you wouldn't mind standing,
we have Evan Hensley and Austin Dyches. These are the husbands
of the two witnesses today. Evan Hensley is a Sergeant E5.
Austin Dyches is a Specialist D4. We thank you gentlemen for
your service. I'm sorry you're going through this. We
appreciate your wives stepping forward and doing the right
thing and helping us out here and testifying.
Testifying before Congress is not necessarily an easy thing
to do, but we appreciate your sacrifice, and here to help solve
this problem and take care of your--each of you have 2-year-old
daughters. And we again thank you for your service. Thank you.
With that, we'll now recognize the gentleman from Oklahoma,
Mr. Russell, for 5 minutes.
Mr. Russell. Thank you, Mr. Chairman.
I really do appreciate the courage that you have coming
here today. All of you. From the testimony, it appears that
everyone is being very forthright and is owning the problem.
Having raised five children on soldier's pay, at any grade, it
is hard work. And it's infinitely important in order for you to
carry out your missions and your capacities that your family's
taken care of.
I would ask first, Mrs. Hensley, have you or your husband
received any pressure from your chain of command on your
willingness to come forward to testify? Or any discouragement
to and make this problem known?
Ms. Hensley. No, Mr. Congressman.
Mr. Russell. And, Captain Dyches, have you received any
discouragement or pressure about stepping forward and helping
resolve this matter?
Ms. Dyches. No, Mr. Congressman.
Mr. Russell. Okay. Thank you.
Colonel Hoehne, first off, thank you for your distinguished
service. While you're here in a capacity as a director, I know
that you get it from your distinguished service to our Nation
for 26 years. And thank you for that. The fact that you've
owned the problem like a badge today with your forthright
answers gives me some comfort that as we've had these hearings,
that people are trying to solve and work the problem.
With regard to the funding, does any of the funding to
these programs come from the MWR feeds, from commissaries, or
base exchanges or post exchanges?
Ms. Hoehne. No, sir. On the MWR arena, child care is
considered a mission enabler, a category B activity which means
it is partially funded both by appropriated funds and by non-
appropriated funds.
Mr. Russell. Okay. Thank you for that clarification.
And for either you, Colonel Hoehne, or, Mr. Badorrek in
your capacity now that you've jumped into this problem, can you
explain the subsidy cut? I know when I was, you know, serving
my career in the Army, we all got the same amount of money for
food. You know, whether you were a private or a colonel, the
human basic needs is the same.
How can we explain the cut in childcare, and how can we
explain that a 2-year-old is not as important as, say, a 3-
year-old, or is more important than a 3-year-old when it comes
to childcare or the service member or family member's ability
to care for that child? I mean, the needs are still the same.
Have any of you, or even Ms. Ochoa, have any of you discovered
why we have this degradating scale?
Ms. Hoehne. Sir, the program fees charged are based on two
factors. There are nine categories established by DOD based on
pay, combined family income, and so it's not tied to rank or
status, but it's based on combined family income as to what a
fee would be charged within a child care center. Then within
the child care center, fees are graduated according to the age
of the child because there's different ratios required for
childcare.
An infant, you have one caregiver for four infants. So they
are more expensive to care for than school-age children who can
have 1-10 ratio. So school-age children cost less than infants,
basically, within that convoluted fee structure. There's a
matching structure for the Army Fee Assistance Program that we
provide the difference between what is charged off-post and
what you pay on-post up to a certain cap.
Mr. Russell. And I follow the logic of some of that. But I
guess we shouldn't punish our volunteer warriors because of
what their spouses may or may not do, whether they're employed
or not employed. Because by doing so, we discourage all people
that have capacity to defend this Nation. And if we punish
those that have a lack of capacity to care for their children
or we somehow punish those who might have better means to pay
for children and their childcare, it's really irrelevant. It's
kind of like food.
We want the best warriors to defend our country. And by
separating or categorizing somebody's children as more
important or less important based upon their station or the
employment of their spouses, has anyone given any of that a
serious look?
Ms. Hoehne. Sir, all of our children are important to us.
And that is one of the reasons I believe that my chain of
command has directed a number of reviews of the entire
childcare and Fee Assistance Program.
Mr. Russell. Well, I would hope that we would. Our warriors
ask for very little. They certainly don't serve for pay. I
never did. And I would think--you know, I mean, we ask for our
families to be cared for, for certain medical expenses to be
paid for, and for honors at burial. And that's really all we
ask for.
And I think, given the amount of this magnitude of the
problem and the impact it can have on mission readiness, and
we're talking in terms of government dollars, $3 million, it
seems to me like we ought to be able to fix this as quickly as
possible. And I'm satisfied with the answers that I've heard
today that I think the people sitting here are certainly
dedicated to trying to fix the problem. But we need to know how
we can assist in that and break the bureaucracy that has been
well made known through the hearings today. The problem is not
fixed, but it has been exposed, I think, with some good light.
And with that I've exceeded my time, and I yield back, Mr.
Chairman.
Chairman Chaffetz. Thank the gentleman.
I now recognize the gentlewoman from Illinois, Ms.
Duckworth, for 5 minutes.
Ms. Duckworth. Thank you, Mr. Chairman.
I'd like to ask Captain Dyches, is that how you pronounce
it, or either of the two spouses, have any of you been
deployed?
Ms. Dyches. No, Congressman, I have not.
Ms. Duckworth. But Sergeant Hensley, you have? Three times?
So what would have been your frame of mind overseas defending
this Nation in a combat situation if your child was not in
daycare or you couldn't pay for childcare?
I know you're not testifying, but I'm going to ask your
spouse to perhaps speak to how would you feel as a mom knowing
that your husband was in combat and worried about whether or
not your daughter was able to be in daycare or whether or not
you had money to pay for daycare? Would you want him to have
those worries on his mind as he's trying to go out and engage
and bring destruction to the enemy?
Ms. Hensley. No, Mrs. Congresswoman.
Ms. Duckworth. Yeah. This is not just a childcare issue.
This is a military readiness issue. When our troops engage with
the enemy, they should not be worried about whether or not
their daughter is in daycare or whether or not she's sitting on
a corner because she couldn't get in. And I know that, Colonel
Hoehne, you understand this.
And, Mr. Badorrek, you inherited something that you're
trying to fix. But I am ashamed that we have put these families
in this situation. And, frankly, I am astonished that we're
doing this to our military men and women and their families.
You know, at the very same time the Army resisted my bill,
The Mom Act, to provide military women with more than 6 weeks
of maternity leave. So not only are we telling military women:
Hey. You got to go back to Afghanistan after 6 weeks, we're
also telling them we're not going to provide you with the
daycare on base to take care of your children. And then you got
to pay out of pocket, and we're not going to reimburse you.
This is shameful. We are better than that. We're the most
powerful Nation on the face of the Earth, the most powerful
military, the most powerful Army on the face of the Earth. We
can do better. And I hope that you work very closely to fix
this issue.
I'm deeply concerned about this transition period that's
going to end between September of this year and when the
contract with GSA ends. What likelihood, and either Colonel
Hoehne or Mr. Badorrek, you can answer--you should both answer
this. What is the likelihood that there will be a program
administration contract in place by October 1 of 2016? I'm
sorry. Of--when you do the transition, would there be a
contract in place ready to go so that nobody gets dropped, no
child gets left behind, no one falls through the cracks?
Ms. Hoehne. Ma'am, we're looking at getting a contract
established as soon as possible. There will be an overlap
between the contractor and GSA. And the contractor will then
assume more and more and more of the responsibilities as GSA
works exclusively on the backlog. So there is going to be a
contract in place.
Ms. Duckworth. Did I hear correctly that you don't plan on
going back and reimbursing the families for the money that
they're out of pocket?
Ms. Hoehne. Ma'am, what would happen is the Army Emergency
Relief will give the families loans----
Ms. Duckworth. No, no, no, no, no, no, no. Not loans. Are
you going to reimburse them for the money that you were
supposed to pay for them but you screwed up and didn't pay and
now they're out of pocket?
Mr. Badorrek. Yes, they are paid the proper amount from the
day that they applied and should have been paid. So it--the
delay in processing, the action will not impact the amount of
money they paid.
Ms. Duckworth. So they'll get their money back?
Mr. Badorrek. They will.
Ms. Duckworth. Will they get their money back with
interest? I mean, you're asking for a loan from them. Right?
They're carrying you on their family finances.
Mr. Badorrek. No. They would not get interest.
Ms. Duckworth. So basically you're screwing the soldiers.
No? Would you like to give a loan? I know you inherited this
so----
Mr. Badorrek. I mean, my goal is to fix the problem so that
everybody is paid on time.
Ms. Duckworth. Okay. Well, they're not being paid on time.
Mr. Badorrek. Yes.
Ms. Duckworth. So they're not being paid on time. What are
you going to do to fix it? And what are we going to do to make
sure that they get their money back with interest?
Do I need to ask my fellow Members of Congress to hold a
bake sale? Do we need to go on the air and bring this to the
general public and embarrass the Army and--what do we need to
do? Because these fine Americans deserve better, and their kids
deserve better.
I'm going to stay on this. I am sure I have friends across
the aisle who will work with me on this. In fact, The Mom Act
that was supposed to bring--give child care--maternity leave to
military women up to 12 weeks had 20--over two dozen Republican
cosponsors. This is not a partisan issue. This an issue of
doing right by our military. These are men and women who are
willing to die for this Nation. And yet we exploit them and
exploit their children. And that's not acceptable.
Thank you. I yield back.
Chairman Chaffetz. Thank the gentlewoman.
I now recognize the gentleman from North Carolina, Mr.
Meadows, for 5 minutes.
Mr. Meadows. Thank you, Mr. Chairman. And thank you for
holding this hearing.
I must confess this was not an issue that I thought we had
a problem with until I started reading about this hearing, and
then I started talking to some of my staff, and they said not
only is it a problem, but it's an unbelievable problem. And so
on behalf of the United States, my apologies to the families
who have been affected. And truly we do need to make it right,
and with interest.
You know, I agree. I mean, they should not be the
government's bank. And that's what we've essentially made these
fighting men and women's families, the bank for our
inefficiency. So I know we're making progress and a lot has
been said about the progress we're making.
I want to turn back a little bit. Who made the decision and
why was it such a surprise that we were going to have GSA's
improper handling of this? Colonel, do you know? I mean,
because obviously there are two decisions. One is to save
money, which this did not do. But there's also the political
ramification. Well, let's take it from the private sector.
We'll make it part of this agency. We'll grow the agency.
Sometimes those factors play in. So who thought that the GSA
could do a better job than the private sector at administering
this? Colonel?
Ms. Hoehne. Sir, I don't have the information on who
specifically made the decision. It was in August of 2013 before
I arrived at Installation Management Command. But I understand
the logic of the looking at the financial benefit of doing it.
And it was--there was, my understanding, no thought of giving
GSA unnecessary benefit in growing them. It was the knowledge
that GSA was already successfully executing the program and
their willingness----
Mr. Meadows. Executing a different program with far less
people?
Ms. Hoehne. --of the program. Yes, sir. So we knew that
they understood----
Mr. Meadows. What percentage were they executing
effectively?
Ms. Hoehne. Ten to fifteen percent, sir.
Mr. Meadows. Okay. And so the best logistics group in the
world, as some would say, the Army is some of the best
logistics folks in the world, made a logistical decision that
affected families, but they were wrong. You know, to put it in
another vernacular, it would be like having a tank out on the
battlefield with no gasoline to make it work. Was it GSA that
messed up, or was it the Army?
Ms. Hoehne. Sir, it was both of us. It was our lack of due
diligence in ensuring that GSA was ready to take on the
mission, and it was staffing problems on GSA that they didn't
bring up to us.
Mr. Meadows. Okay. But we keep coming back to staffing
problems. And that's like asking a florist if they were
surprised with Valentine's Day coming and they didn't have
enough flowers. I mean, it just doesn't make sense. You knew
how many people were there, so why would they have been
surprised at the processing? GSA, do you want to answer that?
Why were they surprised?
Mr. Badorrek. Why was GSA surprised?
Mr. Meadows. Yeah. I mean, why the big backlog? I mean, if
you're so efficient at it, why would you be surprised?
Mr. Badorrek. So I could speculate on that. I was not
there, but I think they probably underestimated the number of
providers.
The other thing that I would tell you is if you're going to
save money from the prior vendor, you have to have better
systems or lower cost of labor, and I think----
Mr. Meadows. And do you have better systems and lower
costs?
Mr. Badorrek. I don't--I don't know--I know that our
systems were not good and GSA underestimated what----
Mr. Meadows. But today, I'm mean, you're looking backwards,
obviously you've looked at that, do you have better systems and
lower costs providers? Yes or no.
Mr. Badorrek. I do not know what the other vendor had, but
we do not have a system that was adequate.
Mr. Meadows. So you don't even know today whether you were
going to be more cost efficient or not. So it just sounds like
that we messed up but we really don't know why we messed up,
and so potentially we could mess up again.
Mr. Badorrek. No. GSA has implemented a system to handle
the application processing that is now in place that was put up
quickly. It will help us deal with the backlog going forward
but----
Mr. Meadows. Okay. We have a backlog. So let me, in the 24
seconds I have remaining, what would be the problem of paying
all of the invoices and relying on the military men and women
to be men and women of integrity, who I believe they are, and
say: Golly. We may have made a mistake. It couldn't have been
any bigger a mistake paying all the invoices and just getting
them paid at this point than the $8.4 million mistake that
obviously we've just made.
Why don't we just go ahead and pay them? Cut the check in
30 days to everybody. Eliminate the backlog.
Ms. Hoehne. Sir, that's essentially what we have directed
GSA to do is, when there are discrepancies, pay the amount that
you know is--was right, or pay the amount that you paid last
month, and then worry about the----
Mr. Meadows. So if you've directed them to do that, GSA,
are you going to be able to pay everybody in 30 days and so men
and women are not going to have to worry about bad credit or
bankruptcy or child--are you going to pay it all in 30 days?
They've instructed you, is what Colonel just testified.
Mr. Badorrek. Yes. We are going to pay----
Mr. Meadows. So the backlog will be gone in 30 days.
Mr. Badorrek. We have a backlog of applications, but the
backlog of invoices will be significantly improved with this
policy change.
Mr. Meadows. ``Significantly improved'' is not all paid.
Can you pay them in 30 days?
Mr. Badorrek. We can pay them in 30 days, yes.
Mr. Meadows. Will you pay them in 30 days? Do I have your
commitment today?
Mr. Badorrek. Yes. We will pay them.
Mr. Meadows. All right. Thank you.
I yield back.
Chairman Chaffetz. Thank the gentleman.
I now recognize the ranking member of the full committee,
Mr. Cummings of Maryland, for 5 minutes.
Mr. Cummings. Thank you very much, Mr. Chairman.
To the panel and to the committee, I'm sorry. I had some
other pressing matters this morning. But I have kept up with
the hearing.
Captain Dyches and Ms. Hensley, I want to thank you both
for being here today and for the sacrifice you and your
families make for this country. I recently held a forum with
women in the military, and the number one issue that they
brought up was child care. And that the problem with trying to
pursue a career and quite often having to be called into some
type of duty sometimes on short notice and not--and worrying
about their kids.
We spent a lot of time today listening to the Army and GSA
explain what was went with the childcare assistance program,
but we can't forget that the program's mismanagement has real
life consequences that our military families suffer. Two of
those families are represented today, and it's important to
hear directly from them.
Now, Ms. Hensley, let me start with you. Your husband is an
Army sergeant. Is that right?
Ms. Hensley. Yes, Ranking Member Cummings.
Mr. Cummings. And in your written statement, you note that
you enrolled your daughter in the program on July 14, 2014, but
once GSA took over, you had to resubmit your application and
materials, and GSA required different materials than what you'd
previously submitted. Is that right?
Ms. Hensley. Yes, Mr. Ranking--or yes.
Mr. Cummings. That caused your application resubmission to
be delayed. Is that right?
Ms. Hensley. Yes.
Mr. Cummings. Now once you resubmitted the application, you
waited for well over a month before GSA informed you that it
had been received. Is that correct?
Ms. Hensley. Yes.
Mr. Cummings. In fact, your husband emailed GSA on
September 17, 2014, saying, ``I need to know how much longer
this is going to take. I'm barely able to afford my daughter's
day care. I will have to pull her out soon if I do not get
answers.''
Approximately how long after that email did it take before
you finally received the first childcare subsidy payment?
Ms. Hensley. I believe when we emailed them they emailed us
back within 2 days, and it took them a month--or after--it took
them a month because they told us that they received our
application in August, and here it was September 19. So they
never told us that they received any application. From there,
we ended up getting our pay. It was in November.
Mr. Cummings. So that's quite a while. Isn't it?
Ms. Hensley. Yes.
Mr. Cummings. And you needed that money. Is that right?
Ms. Hensley. Absolutely.
Mr. Cummings. Badly.
Ms. Hensley. Yes.
Mr. Cummings. So from July 2014, when you first applied for
the program, to November 2014, your family received no
childcare fee assistance. What impact did that have on your
family?
Ms. Hensley. We were put in a situation where we had to
actually ask our family for money. It was the most stress that
I think I have ever had to endure in my life, not knowing if
you're going to be able to afford diapers for your child. It
was very heartbreaking, the things that we had to do to make
sure our child was able to continue to be in day care because
not only was it about the day care, but I was within a few days
from putting in my two weeks' notice from my job.
Mr. Cummings. Wow. Captain Dyches, your family experienced
similar delays in awaiting childcare fee assistance. You told
NBC that childcare subsidies for your daughter was delayed up
to 3 months. Is that right?
Ms. Dyches. Yes, Ranking Member Cummings.
Mr. Cummings. And what impact did that have on your family?
Ms. Dyches. Monetary resources were severely depleted. We
weren't able to pay for student loans that we were trying to
pay off. We had to put lots of things on hold in order to pay
for the day care that--unexpected day care costs, basically
Mr. Cummings. So then I assume that you were putting off
paying certain things that needed to be paid. And then a lot of
people don't know how that works, but you get on a slippery
slope, and just trying to pay Paul, but Peter doesn't have any
money so you're just struggling. Is that right?
Ms. Dyches. Yes, Mr. Cummings.
Mr. Cummings. And these next questions are to either one of
you. Has the situation improved?
Ms. Hensley. As of November of 2014, we have not had a
problem with the GSA.
Mr. Cummings. And you, Ms. Dyches?
Ms. Dyches. My issues are ongoing. Twice we were delayed up
to 3 months on payments, and currently we are trying to figure
out how the payments are being calculated and why once my
daughter turns 2 the GSA receives a significant decrease in the
amount that they have to paid while we retain the exact same
amount that we pay, while the Hensley family actually received
opposite news, that once their child turned 2 they received a
discount.
So everybody kind of gets a discount, but that wasn't our
case. And no one has been able to explain to me how it's
calculated, why it's calculated, why there a difference in
change. Yeah. There's still ongoing issues.
Mr. Cummings. Now, Mr. Badorrek, I understand that you
testified under oath that any families that were forced to pay
funds out of their own out of pocket will be fully reimbursed
for what they would have been due under the program. Is that
right?
Mr. Badorrek. Yes.
Mr. Cummings. Say it loud. I want to make sure I hear you.
Mr. Badorrek. Yes. That's correct.
Mr. Cummings. And, Captain Dyches, did you hear what he
just said?
Ms. Dyches. Yes, I did.
Mr. Cummings. Ms. Hensley, did you hear what he just said?
Ms. Hensley. Yes, I did.
Mr. Cummings. Okay. I want to come back to us and let us
know that this has--this has not happened yet. Is that right,
Ms. Dyches?
Ms. Dyches. I have been paid up to July. So I'm waiting--
they--we've been told that they're always going to be a month
behind in payments. That wasn't the case before the GSA took
over our contract. But we've been told that we will always be a
month behind. Or that the GSA will be.
Mr. Cummings. As I close, did you have a comment, Ms.
Hensley?
Let me be clear that if you fail to get a dime, I want you
to let us know. Okay? And we will do everything in our power to
make sure you get what you deserve. Okay?
Ms. Dyches. Thank you, Ranking Member Cummings.
Mr. Cummings. Thank you.
Thank you, Mr. Chairman.
Chairman Chaffetz. Thank you. And we do want to follow up
with you. It wasn't for a lack of personnel. There was nearly
190 people at the GSA working on this. And yet there were less
than 40 that were working on it prior under Child Care Aware. I
think one of the screw-ups, one of the messes, had to do with
software and systems that were undervalued. One of the big
stories that we're trying to follow and track down in overall
government is--since I was able to take office, since President
Obama took office, the Federal Government has spent in excess
of $525 billion on IT, and it doesn't work.
Chairman Chaffetz. And so even though there are millions of
dollars potentially that was thrown in to try to duplicate what
Child Care Aware was able to do with their software programs,
that was never valued. And so what you find is that they were,
GSA was dealing with an Excel spreadsheet and trying to do this
by hand and they could never keep up.
The subcommittee chairman of a new subcommittee that we
created this year is Mr. Hurd of Texas who is helping to
spearhead this, he understands IT, working closely with Mr.
Lieu and others to try to tackle the software portion of this.
We're now pleased to recognize Mr. Herd. Because I think at the
heart of the ability to leverage people, dollars, talent, was
the fact that GSA never had a plan that was adequate to deal
with the systems to automate this and to try to go through with
thousands of invoices, maybe $300, maybe $1000 at a time, the
thing fell apart. It got behind. It compounded. And it
continued to grow in its problems.
I'm now pleased to recognize the gentleman from Texas, Mr.
Hurd.
Mr. Hurd. Thank you, Mr. Chairman. And I want to start off
in joining all of my colleagues in thanking you, Ms. Hensley,
for showing up here today and shedding light on this problem.
You shouldn't have to be here to be frank. This is something
that we should be doing. It should happen. A lot of stuff that
we deal with up here in Washington, D.C. I would categorize,
and it's unfortunate, but being able to fight the bureaucracy
for people that need it fought, I think that's like 95 percent
of our job. So thank you for being here today.
I wasn't in the military but I served in the CIA and I
served alongside the men and women in the uniform in rough
places like Pakistan and Afghanistan. And I recognize the
pressures on families. And sometimes that's forgotten. So thank
you for being here today. And I apologize that you actually
have to be here today. It appears that the Army and GSA
determined that it would not use a software program that may
have been more effective than what was ultimately used by the
Army and the GSA. And my first question is to you, Mr.
Badorrek, when did you join the----
Mr. Badorrek. My start date was December 29th, 2014.
Mr. Hurd. December 2014. So why did--and you may know the
answer and, Colonel Hoehne, you may know this, why did the Army
decide not to use the software provided by the previous program
administrator? Anyone?
Ms. Hoehne. Sir, I'm not sure of the answer. I would like
to take that so I can get you an accurate answer to that.
Mr. Hurd. Interesting. The committee has also learned from
a number of sources that the Army may have invested almost $3
million into software that was used from the previous
providers. Are you aware of this?
Ms. Hoehne. No, sir.
Mr. Hurd. Three million dollars is a lot of money for a
software program. I think we could have paid all the childcare
fees with that $3 million instead of wasting it on some IT
system. And how many applications are we actually processing?
Mr. Badorrek. We are processing about 1600 a month right
now.
Mr. Hurd. Sixteen hundred a month. Does that need $3
million to--$3 million, that's not an inordinate large number.
We're not talking about a big data problem here. So my question
is, so you don't know why the previous software that was
obviously working, right, because we weren't having these
problems prior to GSA taking this over.
So we have a software system that is supposed to help
increase efficiencies, that was working, we decide not to use
it, we put $3 million into it, and now we're going with
something else. What's the plan on how to process these
applications in the future.
Mr. Badorrek. GSA has switched to Salesforce software to
process these applications.
Mr. Hurd. And how much are we spending on that?
Mr. Badorrek. We spent $400,000 on that.
Mr. Hurd. Do you foresee any future problems with having
Salesforce manage 1600 applications a month?
Mr. Badorrek. No. Salesforce will enable us to process the
applications more efficiently. The prior system did not work
effectively.
Mr. Hurd. How long does it take to process an application
using Salesforce?
Mr. Badorrek. It depends on whether you have the workers
there. But you can process--you have to evaluate the
application. But Salesforce doesn't have the limitations----
Mr. Hurd. Most of our Members' offices are processing
thousands of pieces of mail, snail mail a week. And to say that
you can't process 1600, that you don't have enough people to
process 1600 applications in a month? How many people do you
think you need?
Mr. Badorrek. It's hard to say. We have a huge backlog
right now. I would think we would need in the neighborhood of
70 to 80 people.
Mr. Hurd. How many?
Mr. Badorrek. Seventy.
Mr. Hurd. Seventy people?
Mr. Badorrek. You know, I really don't know. I'm guessing.
My focus has been on getting the number of people in place and
the tools in place to reduce the backlog.
Mr. Hurd. So 1600 divided by 70 is what? Can anybody do the
quick math? Ted Lieu, you're a smart guy.
Mr. Badorrek. But you also have to process 12,000 payments
a month. You have 300 emails coming in a day, 400 phone calls a
day today. Obviously, when we can----
Mr. Hurd. That sounds like a congressional office and we
have 23 people that staff that. So please get back to us on why
the decision was made not to use the previous software that we
invested $3 million which would have probably paid for all the
health care that these men and women of our military could have
used to pay for their child care.
This is, you know, the Federal Government is spending over
$80 billion a year and 80 percent of it is on legacy systems.
To me, this is just, this is outrageous that we're not using
tools at our fingertips to make us more efficient.
I have exceeded my time. And, again, Ms. Hensley, please
tell your friends thank you for what they do. And, Captain
Dyches, thank you for your willingness to appear before us. I
know the difficulty that you all are both in. Many people here
that you've got to talk to today understand your plight. And
we're here to fight for you.
Thank you. And I yield back, Mr. Chairman.
Chairman Chaffetz. I thank the gentleman. I now recognize
myself for another round. We're very--you've given--the GSA has
given us such a wide variety of numbers. We asked if there are
only 9,000 to 10,000 families in the program, why is the GSA
receiving 12,000 invoices a month. Maybe there are a variety of
different children. But can you provide us more specificity?
Mr. Badorrek. Yes. The reason it's more than the 9,000 is
there's a separate invoice for each child.
Chairman Chaffetz. Okay. And part of--our office receives
roughly 10,000 emails and letters per month. Every one of them
gets a response. And we do this with just a handful of people.
Captain Dyches, what is the monthly cost, childcare cost?
Ms. Dyches. A thousand two hundred.
Chairman Chaffetz. And for Ms. Hensley, how much?
Ms. Hensley. About $1200.
Chairman Chaffetz. You can see the pressure on families in
trying to float this. I still want to have an answer at some
point on how we're going to make these people whole. The Army,
somewhere between the Army and GSA, there's going to be credit
monitoring services that are offered, correct?
Mr. Badorrek. That's correct.
Chairman Chaffetz. What is the cost of that?
Mr. Badorrek. That cost is about $200,000.
Chairman Chaffetz. So that $200,000 expenditure for credit
monitoring, why are you doing the credit monitoring?
Mr. Badorrek. We had a PII----
Chairman Chaffetz. A what?
Mr. Badorrek. We had a PII breach. And we offered credit
monitoring to all----
Chairman Chaffetz. Without the acronym, what was that?
Mr. Badorrek. The privacy information of the families
were----
Chairman Chaffetz. Why did you have a data breach?
Mr. Badorrek. In our attempt to get contractors set up and
able to do work and support the families, we started training
them and set up PCs. They should not have seen any personal
information for families. It turns out that we had a couple--
some of the contractors that did.
Chairman Chaffetz. So you violated your own policy, allowed
contractors to see personal identifying information. And some
of those contractors had some nefarious backgrounds, correct?
Mr. Badorrek. Yes, they did not pass the final background
clearance.
Chairman Chaffetz. So prior to passing a background test,
you went ahead and took these young children, their families,
members of our military, and you allowed them access to all
their personal information that was submitted, correct? How
many families were affected?
Mr. Badorrek. We believe that they saw the information on
about 200 families.
Chairman Chaffetz. And that expanded though, there was a
breach of how many people? How many families? It's larger than
200.
Mr. Badorrek. Are you talking about the 8,000 in the IG
report?
Chairman Chaffetz. Yes.
Mr. Badorrek. Yes.
Chairman Chaffetz. There was a second data breach that you
allowed to happen. How many people were involved in that?
Mr. Badorrek. That was a vulnerability.
Chairman Chaffetz. Yes.
Mr. Badorrek. When we installed the Salesforce software,
there were other GSA employees that used that software that
conceivably could have accessed the Army information. We had no
evidence that they did. It was----
Chairman Chaffetz. But you couldn't tell. I mean, people
get online and go look at it, right? And that affected how many
people?
Mr. Badorrek. They would have to know the email of the----
Chairman Chaffetz. It's not hard to figure out. So enough
so that you're spending hundreds of thousands of dollars in
credit monitoring. We had a person who had a warrant out for
their arrest and that information included data such as, you
know, where the child, where the children were, their childcare
providers. I mean, these are United States military. We got a
lot of people out here who want to do harm to these good
people. And you're going to offer credit monitoring? Anything
else?
Mr. Badorrek. No. We offer credit monitoring to families.
Chairman Chaffetz. How do you have--has anybody been fired?
Mr. Badorrek. We have replaced the top tier management. No
one has been fired.
Chairman Chaffetz. To the point that was brought up by Mr.
Mica, you're going to provide us a list of the people who were
involved and engaged in this process, including their
compensation and any bonuses that they've had, correct?
Mr. Badorrek. Correct.
Chairman Chaffetz. When will you provide that information?
Mr. Badorrek. I believe I can provide that in a week.
Chairman Chaffetz. One of the great frustrations here is
that people make mistakes. I get that. But this is not a simple
mistake. You're violating policy and there doesn't seem to be
any consequence to that. If somebody in the military knowingly,
willingly violates policy, they could very well be terminated.
There are lots of other disciplinary things that could happen
to them. But in the Federal Government, at the GSA--you know,
they're overwhelming good people, they're good, hard-working,
decent, patriotic people. But they do a good job. And they
abide by the rules. You set up the rules. You have a couple of
data breaches. You make a multimillion-dollar mistake, it
affects tens of thousands of people. And is anybody
disciplined?
Mr. Badorrek. No one has been disciplined.
Chairman Chaffetz. No one has been disciplined? It just
continues on. Ms. Hoehne, I am glad that Child Care Aware is
evidently going to come in and try to help save the day. When
did you first contact Child Care Aware?
Ms. Hoehne. Sir, it was this month.
Chairman Chaffetz. It was this week, wasn't it?
Ms. Hoehne. Yes, sir.
Chairman Chaffetz. It was this week. Now, I'm glad we're
having a hearing. I'm glad that that's putting a spark under
you. But when you get an IG report and you know that there are
people in trouble, that should have provided the spark.
And when you got a second IG report saying the problem has
doubled, that should have provided the spark. We can't hold
enough hearings to get enough spark under people to actually
take the action. I'm glad that you're doing it. I agree with
Mr. Russell that, I appreciate that you're owning up to this.
But not only did we get behind on payments, we did data
breaches, we provided access to information that should never
have been there. Nobody gets disciplined. Nobody is held
responsible.
And I think the problem is actually bigger than $8.4
million because now we have credit monitoring that's going to
have to go on. You just don't just do that for 4 months. That's
going to have to go on for years. And the people that get left
out of this, Ms. Hensley, Captain Dyches, their families, and
thousands of others, their credit gets screwed up. How are you
going to fix that? It's one thing to have credit monitoring.
But if you credit score goes way down, your cost of money and
access to capital, your ability to go out and finance a home
and go buy furniture and do whatever else, to be able to go out
and get cable television, for goodness sake, they're going to
look at your credit score and say you screwed up.
I would really challenge you both please to come up with
something, I don't know if it's a letter, we were talking about
this, is there a letter that you can provide that they can
share with creditors to say this wasn't our fault? It was the
United States military's fault. It was the Army's fault.
Something like that. I'm struggling with a solution to try to
figure out how to help these families because they were put in
a precarious position that they should have never been put
into. I'm open to ideas and suggestions.
I do think we need to look at the software issue. I do want
to have a more specified number. I think this is a government-
wide problem. I don't think this is specific to the GSA. I
don't think it's specific to the Army. I don't think it's
specific to the Pentagon. I think it's government wide. I think
we could pick apart any department and agency and we would see
how software has screwed up their lives. I don't know how you
spend $400,000 on Salesforce.com to process 12,000 or so
applications. They're a good company, very successful. Maybe I
don't understand their pricing schemes. But, my goodness,
there's got to be a better, smarter way of doing this.
I now recognize Mr. Lieu for whatever comments he might
have.
Mr. Lieu. Thank you, Mr. Chair. I want to follow up on this
unauthorized access to private information. There were two
incidents. In the February incident, about 12 families were
affected according to the inspector general. The GSA then
implemented new policies to prevent a repeat of the incident,
including increased training, document tracking, eliminating
the option for teleworking. Mr. Badorrek, is that correct?
After the first incident, you guys put in these new procedure?
Mr. Badorrek. Yes. That's correct.
Mr. Lieu. And then the IG report 4 months later, 200 GSA
employees had access to sensitive information of 8,000
additional families. So how did the GSA put in all these new
training programs and have a far worse problem 4 months later?
How did that happen?
Mr. Badorrek. That was not related to contractors. That was
a software change. It was not deemed a breach but a
vulnerability. There were 200 GSA employees that already had a
level of clearance that conceivably could have accessed this
information. It is very likely that they did not. But they were
already working for GSA, had clearance. And they should not
have been able to figure out how to access the Army families.
We don't believe that any did. But they could have. And that
was a fix that we had to do to our software.
Mr. Lieu. What is the GSA doing to make sure this doesn't
happen again in the future in terms of unauthorized access to
private information?
Mr. Badorrek. Our IT organization has made a mistake. They
have procedures in place. They've checked all the things around
the Salesforce applications to make sure that there's no other
potential problems. And they fixed the problem in less than 24
hours.
Mr. Lieu. Are GSA contractors now required to complete
initial background investigations before being granted access
to the sensitive information of military families?
Mr. Badorrek. What was your question, sir?
Mr. Lieu. Are GSA contractors now required to complete
background investigations?
Mr. Badorrek. Yes. They're required to receive initial
clearance background investigation through OPM.
Mr. Lieu. Do you think that GSA has sufficient safeguards
now in place to make sure that this doesn't happen again?
Mr. Badorrek. I can't guarantee that. I know that we do
have safeguards in place.
Mr. Lieu. I do agree with the chair that I think this is a
government-wide problem. It seems like every 2 months in this
hearing room we hear about data breaches and unauthorized
access to private information. And then credit monitoring,
that's just not acceptable. And so I think our Federal
Government as a whole needs to do far better in terms of cyber
security and making sure that unauthorized access doesn't
happen.
Let me just maybe put sort of out there what I heard under
oath today. I heard under oath that the GSA is going to clear
the invoice backlog within 30 days and make payment on those
invoices. I also heard under oath that the GSA and the Army is
going to submit a plan within a week to this committee on how
to go forward and make sure this doesn't happen again on a
going-forward basis.
I also heard under oath that the Army and GSA are going to
see if anyone should be disciplined for this fiasco. And I also
heard under oath that military families who have had to make
payment out of pocket will also be fully reimbursed for those
payments.
I thank you for your testimony under oath. And look forward
to having this problem fixed.
Chairman Chaffetz. Thank the gentleman. One last thing, Mr.
Badorrek, now that it's come to light that there are some 4,000
voicemails that were purposefully deleted and that there are an
untold number of emails that were deleted, what are you going
to do?
Mr. Badorrek. We have a record of the 4,000 emails. We have
looked at all--4,000 voicemails, I'm sorry. We have a record of
the 4,000 voicemails. We have gone through every one of them.
While the voicemails themselves were not kept, we have a
separate log that we used to call those back. We have looked at
the 4,000, looked at how, identified how many have already
talked to us, had issues resolved, how many were duplicates.
There are a little over 2,000 remaining on that list. GSA is
going to call back those 2,000 voicemail messages.
Chairman Chaffetz. What about the emails?
Mr. Badorrek. The emails I need more information on. And I
will get that.
Chairman Chaffetz. Ms. Ochoa, can you give us any insight
into the deleted emails and deleted voicemails?
Ms. Ochoa. We have more information on the voicemails than
on the emails. What we were told, what we learned through the
review was that between December and June, there had been a
backlog that had accumulated of 5,100 voicemails. The content
of all of those voicemails we were told was deleted. The log
that was kept was of the numbers associated with the
voicemails.
For a time, GSA program staff were calling back some of the
numbers on that log, but found that it was taking them over 31
days on average to get through that part of the backlog. And
when they got to about 4,000 numbers associated with voicemails
left, they decided not to return those calls. It's new
information to me today that they've been since now calling
some of those numbers.
Chairman Chaffetz. Is that right? Are you actually calling
those people back?
Mr. Badorrek. No. We are going to call those numbers. The
4,000--at the time this happened, we set up a new call center
operation. We were able to answer over 90 percent of the calls
versus 30 percent before. It is new information to the IG. But
that was yesterday that we took those numbers, identified them,
identified how many had already called back or how many we had
talked to. And we now know how many we need to call back. And
we will do that.
Chairman Chaffetz. So you have good military families,
people like Captain Dyches and Ms. Hensley and their husbands
or wives or whoever it is calling and asking for help. Somebody
made a decision to say we're not doing that anymore. Somebody
made a decision that we're just going to delete those, erase
them and move on. And there's Federal law, we believe this
falls under the Federal Records Act.
One of the answers that I would hope you would have is you
are going to make communication with the archivist as required
by Federal law to try to recover this information, make note of
it. I also think you need to communicate and work with the
inspector general because Federal employees are not allowed to
just simply go out and erase Federal records. We're dealing
with this on a couple different fronts. Are you going to work
with the IG on this?
Mr. Badorrek. I will work with the IG on this.
Chairman Chaffetz. They'll have full cooperation with the
GSA as she and the rest of her staff look at this?
Mr. Badorrek. Yes. We will cooperate fully with the IG.
Chairman Chaffetz. Thank you. I do appreciate it. Listen,
we've got a lot of good men and women who serve this country.
They deserve better. I think that has been exemplified here
over the last 2 1/2 hours through this hearing.
We do need an action plan for moving forward. We are not
only the Oversight Committee, we're also the Government Reform
Committee. So we can highlight, put a spotlight, a big bright
shiny light on things. But then we also want to get to the
reform part of it. And I think Mr. Lieu and I and others on
this panel desperately want to be helpful in that part of the
solution.
Again, I will say, I've said many times, we want to find a
way to help make these people whole. Because the harm that
they've had at no cause of their own has not just been oh, they
need ongoing credit protection. But you've harmed their credit
scores. You've hurt familial relationships, people who have had
to loan money. And in some cases, it's gotten so desperate that
some people have had to actually file bankruptcy because they
got so behind and they just decide to put it on a credit card
and then there's interest charged. And the next thing you know,
you're paying 20 percent on your cash flow. And they shouldn't
be put into that situation. So we need help on that solution as
well.
We appreciate the spirit, particularly, Ms. Hoehne and Mr.
Badorrek, in which you've testified today. It's been a good,
candid, I think, discussion. And we appreciate your candor
here.
To Ms. Ochoa and your staff, you have hundreds of people
that work in the inspector general's office. We thank them for
their good hard work. And they spend sometimes years working on
projects, and then we have a hearing. But we appreciate their
good work. You've shed light on something. We do appreciate the
good work of Channel 4, the NBC affiliate here in Washington,
D.C., because it sparked a lot of action, quite frankly, here
in Congress. It sparked action in helping to solve individual
problems. And that has been good work.
And to Ms. Dyches and Ms. Hensley, I hope at some point we
get to meet your 2 year-old daughters. We thank you for taking
time, all four of you, your husbands are here, taking time away
from work that has its costs unto itself. But the candor and
being courageous enough to step forward and shedding light on
this problem. I know there are thousands of families who are
very grateful that you represented them here today. So with
that, this committee stands adjourned.
[Whereupon, at 11:26 a.m., the committee was adjourned.]
APPENDIX
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