TITLE: B-308044, Patent and Trademark Office--High-speed Internet Access in Employees' Homes, January 10, 2007
BNUMBER: B-308044
DATE: January 10, 2007
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B-308044, Patent and Trademark Office--High-speed Internet Access in Employees' Homes, January 10, 2007

   Decision

   Matter of: Patent and Trademark Office--High-speed Internet Access in
   Employees' Homes

   File: B-308044

   Date:  January 10, 2007

   DIGEST

   The United States Patent and Trademark Office (PTO) may reimburse
   employees for high-speed internet service at employees' homes incident to
   the agency's telework program. We recommend that PTO periodically review
   reimbursements to ensure that it has adequate safeguards against private
   misuse and is reimbursing employees for home internet service used for
   official purposes.

   DECISION

   The Acting Chief Financial Officer of the United States Patent and
   Trademark Office (PTO) has requested an advance decision under 31 U.S.C.
   sect. 3529 on the propriety of reimbursing its employees for costs
   associated with maintaining high-speed internet access at employees' homes
   incident to the agency's telework program. Letter from Barry K. Hudson,
   Acting Chief Financial Officer, United States Patent and Trademark Office,
   to Anthony H. Gamboa, General Counsel, GAO, June 15, 2006 (Hudson Letter).
   As we explain below, PTO may reimburse employees for high-speed internet
   access, but we recommend that PTO periodically review reimbursements to
   ensure that it has adequate safeguards against private misuse and is
   reimbursing employees for internet service used for official purposes.

   Our practice when rendering decisions is to obtain the views of the
   relevant federal agency to establish a factual record and to elicit the
   agency's legal position on the matter. GAO, Procedures and Practices for
   Legal Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept.
   2006). In this regard, PTO supplied additional information, including a
   draft statement of policy and procedures for its proposed reimbursement
   program, in September 2006. Letter from James A. Toupin, General Counsel,
   PTO, to Thomas H. Armstrong, Assistant General Counsel for Appropriations
   Law, GAO, Sept. 6, 2006 (Toupin Letter), enclosing PTO Internet Service
   Provider Reimbursement Policy for Patents Hoteling Programs (Policy).

   BACKGROUND

   The Patent and Trademark Office is a federal agency within the Department
   of Commerce charged with promoting the progress of science and the useful
   arts by securing for limited times to inventors the exclusive right to
   their discoveries.[1] PTO proposes a telecommuting program that would
   permit its employees to telecommute up to 4 days per week from an approved
   designated alternative work site, typically the employee's home. Hudson
   Letter. The agency believes the program will improve workforce recruitment
   and retention, reduce traffic congestion and pollution in the metropolitan
   Washington, D.C., area, and realize substantial cost savings to PTO. Id.
   PTO expects to have 3,300 employees participating in the program by 2011.
   Id. PTO would require employees to maintain high-speed internet access
   meeting certain minimum technical requirements at their residence or other
   designated alternative work site. Id. As part of the telecommuting
   program, PTO proposes to reimburse participating employees for the costs
   employees incur to maintain such internet access. Id.

   Employees requesting reimbursement must submit copies of invoices from
   their internet service provider (ISP) and attest to the appropriate
   percentage of ISP services used for work-related purposes. Id., Toupin
   Letter. Employees would be eligible for only 50 or 100 percent
   reimbursement for ISP connection depending on the amount of monthly
   business use of the internet service. Toupin Letter. For example,
   employees requesting the full 100 percent reimbursement would attest to
   the following: "I hereby certify that my Internet service connection for
   which I am requesting reimbursement has been used solely for official
   USPTO purposes (including `limited personal use' allowed by the USPTO's
   `Rules of the Road')." Policy at para. 1. Alternatively, employees could
   sign the following certification for 50 percent reimbursement: "I hereby
   certify that my Internet service connection for which I am requesting
   reimbursement has been used in part for official USPTO purposes. Personal
   use was less than 50% of the total usage." Id.

   The program would only reimburse the basic rate for ISP connection
   services per billing period. See Policy at para.12. That is, PTO would not
   reimburse charges or costs associated with service initiation, activation,
   installation, or deactivation; taxes; equipment rental fees; or any other
   miscellaneous charges or fees. Id. at para. 14; Hudson Letter.
   Reimbursements also would be limited to the amount PTO would have had to
   pay to procure these services directly. Id. The maximum allowable
   reimbursable amount for high-speed internet access would be $100 per
   month. Policy at para. 5.

   To ensure that the program only covers ISP connection costs, PTO would
   deduct amounts from reimbursement requests based on certain required
   employee disclosures. For example, participating employees would be
   required to disclose any "free" equipment or other promotional items or
   rebates that they receive from their ISP. Id.  at para.12. PTO would
   deduct amounts based on the facts and circumstances of each case,
   including fair market value of the equipment, service agreement terms, and
   other items. Id. Employees also would be required to disclose whether the
   ISP provides "bundled" services, for example, cable television and/or
   telephone service along with high-speed internet connection; only the pro
   rata share of ISP costs would be reimbursable. Id. at paras. 4(a), 11.
   Also, if the ISP offers a discount for bundled services, the pro rata
   share of the discount would be applied to the ISP costs to determine the
   reimbursable amount. Id. If bundled services do not provide pricing
   information sufficient to determine the pro rata costs of the ISP
   component, no ISP costs would be reimbursable. Id. at para. 4(b).

   PTO has imposed other controls that it believes will help ensure that ISP
   services are reimbursed only for work-related purposes. For example, PTO
   would measure the productivity of participating employees biweekly,
   quarterly, and annually. Toupin Letter at 2. Employee performance plans
   establish standards for required production rates. Id. Patent examiners'
   work, for example, is primarily production-oriented, measured in precisely
   defined actions taken with respect to patent applications. Id. Examiners'
   patent files are also tracked in the agency's Patent Automated Locating
   and Monitoring (PALM) system. Id. To participate in the telework program,
   an employee must be rated at least "fully successful" overall in the most
   recent performance evaluation, not be under any performance or conduct
   warnings, and must agree to give up the employee's individual office at
   PTO headquarters. Id. at 3.

   DISCUSSION

   The Patent and Trademark Office asks whether it may use its appropriations
   to reimburse employees for home high-speed internet access under its
   proposed telecommuting program.

   Public Law 104-52 authorizes federal agencies to use appropriated funds to
   install telephone lines and "necessary equipment" and to pay monthly
   charges in any residence of an employee authorized to work at home,
   provided that the agency "certifies that adequate safeguards against
   private misuse exist, and that the service is necessary for direct support
   of the agency's mission." Treasury, Postal Service, and General Government
   Appropriations Act, 1996, Pub. L. No. 104-52, title VI, sect. 620, 109
   Stat. 468, 501 (Nov. 19, 1995), reprinted at 31 U.S.C. sect. 1348 note.

   PTO has determined that internet access is "necessary equipment" for PTO
   employees authorized to work at home and necessary for direct support of
   PTO's mission as required by section 620 of Public Law 104-52. Internet
   service has become an essential tool in today's workplace. As PTO
   explains, patent examiners must have high-speed internet access to
   telework without diminished performance. We agree. Like telephone service,
   internet access is necessary for PTO employees, regardless of worksite,
   and in particular to telework without diminished performance.[2]

   The question remains whether PTO can certify, as section 620 requires,
   that its proposal provides "adequate safeguards against private misuse."
   Over the years, our Office has issued a number of decisions concerning
   adequate safeguards for cost reimbursements of items and services that
   would otherwise be considered a personal expense of federal employees.
   Consistent with section 620, we have not objected to reimbursement plans,
   for example, for use of personal cell phones for official purposes where
   adequate safeguards prevent improper reimbursement for personal use.

   We found adequate safeguards in a Nuclear Regulatory Commission (NRC)
   proposal to reimburse employees for the actual costs of maintaining
   personal cell phone service for official use and the additional costs of
   official calls actually made or received on the employees' cell phones.
   B-291076, Mar. 6, 2003. NRC proposed to (1) reimburse the costs of the
   employees' activation plan at an amount no greater than what NRC itself
   would have paid; and (2) adjust the costs of an activation plan to deduct
   the value of so-called "free" telephones and accessories, rationalizing
   that such equipment is not actually free but factored into the plan's cost
   by the service provider. Id.  Importantly, the NRC plan required employees
   to submit a monthly itemization of calls so that NRC could verify which
   calls were personal and which were official in nature. Id. We advised NRC
   that where monthly itemizations are unavailable, prorating
   government-related calls to personal calls with additional tracking and
   accounting procedures might prove an acceptable safeguard to prevent
   abuse. Id., citing B-287524, Oct. 22, 2001.

   In another case, we objected to a Western Area Power Administration (WAPA)
   proposal to reimburse employees for government use of personal cell phones
   at a flat rate, without additional tracking and accounting procedures.
   B-287524, Oct. 22, 2001. Without those additional procedures, WAPA's
   proposal failed to provide adequate safeguards to verify government calls
   and separate them from personal calls. Id.

   Here, PTO has proposed a number of safeguards similar to those we
   considered in NRC's cell phone reimbursement plan. See B-291076, Mar. 6,
   2003. PTO's proposal would require employees to sign an attestation
   certifying the employees' proration of business to personal use of ISP
   services. The agency also would monitor employee performance and
   productivity on a biweekly, quarterly, and annual basis. See 68 Comp Gen.
   502 (1989).[3]

   We do not object to PTO's telecommuting program proposal, but recommend
   that PTO periodically review ISP reimbursements. Periodic reviews, which
   could include such things as analyses of payment trends, would help
   support PTO's factual basis for certifying that it has adequate safeguards
   against private misuse and it is reimbursing employees for home internet
   service used for official purposes. Pub. L. No. 104-52, sect. 620. See
   also 35 U.S.C. sections 3512 (b), (c) (requiring federal agencies to
   maintain internal controls); GAO, Policy and Procedures Manual for
   Guidance of Federal Agencies, title 7 (Washington, D.C.: May 18, 1993),
   available at www.gao.gov/decisions/ppm7.pdf (last visited Dec. 18, 2006).

   CONCLUSION

   We do not object to PTO's proposal to reimburse employees for high-speed
   internet service at the employees' home incident to the agency's telework
   program. We recommend that PTO periodically review the reimbursements to
   ensure that it has adequate safeguards against private misuse and it is
   reimbursing employees for home internet service used for official
   purposes.

   Gary L. Kepplinger

   General Counsel

   ------------------------

   [1] See generally www.uspto.gov (last visited Dec. 14, 2006). PTO's
   statutory authorities are found in title 35 of the United States Code.

   [2] See, e.g., Department Of Transportation and Related Agencies
   Appropriations, 2001, Pub. L. No. 106-346, sect. 359, 114 Stat. 1356,
   1356A-36 (Oct. 23, 2000) (requiring executive agencies to establish
   policies under which eligible employees "may participate in telecommuting
   to the maximum extent possible without diminished employee performance.")

   [3] Our 1989 decision predates the telework statutes cited above, but its
   logic remains relevant. We did not object to the compensation of federal
   employees for work done at home when, among other things, the agency could
   verify and measure the performance of assigned work against established
   quantity and quality norms. 68 Comp. Gen. 502.