District of Columbia: Compensation Simplification Contracting
Requirements (16-MAY-01, GAO-01-690R).
The District of Columbia Appropriations Act of 2001 provided a
federal payment of $250,000 to the Mayor of the District of
Columbia (DC) for a contract to study and then develop a plan to
simplify the compensation systems, schedules, and work rules
applicable to DC government employees. The act placed several
conditions on the appropriation, one of which was that the
Comptroller General review the proposed solicitation for the
contract to ensure that it adequately addressed all of the
elements stipulated in the act. Government officials initially
told GAO that they planned to apply the $250,000 payment to
existing contracts that were being used in the District's
independent effort to reform its classification and compensation
systems--and therefore would not carry out the conditions that
Congress had established for receipt of the funds. However, the
officials more recently said that the District no longer plans to
use the funds because doing so would delay its reform effort.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-01-690R
ACCNO: A01012
TITLE: District of Columbia: Compensation Simplification
Contracting Requirements
DATE: 05/16/2001
SUBJECT: Payroll systems
Municipal governments
Government contracts
State and local procurement
Solicitation specifications
Appropriation limitations
District of Columbia
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GAO-01-690R
GAO- 01- 690R DC Compensation Simplification
United States General Accounting Office Washington, DC 20548
May 16, 2001 The Honorable Joe Knollenberg Chairman The Honorable Chaka
Fattah Ranking Minority Member Subcommittee on the District of Columbia
Committee on Appropriations House of Representatives
The Honorable Mike DeWine Chairman The Honorable Mary Landrieu Ranking
Member Subcommittee on the District of Columbia Committee on Appropriations
United States Senate
Subject: District of Columbia: Compensation Simplification Contracting
Requirements
The District of Columbia Appropriations Act, 2001 (Appropriations Act)
(Public Law 106- 522, Nov. 22, 2000) provided a federal payment of $250,000
to the Mayor of the District of Columbia (DC) for a contract to study and
then develop a plan to simplify the compensation systems, schedules, and
work rules applicable to DC government employees. The act placed several
conditions on the appropriation, one of which was that the Comptroller
General review the proposed solicitation for the contract to ensure that it
adequately addressed all of the elements stipulated in the act. As requested
by your staff, this letter summarizes the actions that we took in response
to this mandated review.
Results in Brief
District government officials initially told us that they planned to apply
the $250,000 payment to existing contracts that were being used in the
District?s independent effort to reform its classification and compensation
systems- and therefore would not carry out the conditions that Congress had
established for receipt of the funds. However, the officials more recently
said the District no longer planned to use the funds because doing so would
delay its reform effort. The City Administrator said
GAO- 01- 690R DC Compensation Simplification Page 2 that he would request
the District?s Chief Financial Officer to make a formal
rescission request to Congress.
Requirements in the Appropriations Act
The Appropriations Act provided a $250,000 payment to the District Mayor for
a contract ?for the study and development of a plan to simplify the
compensation systems, schedules, and work rules applicable to employees of
the District government.? The act placed several conditions on the
appropriation.
First, the plan developed pursuant to the contract was required to include,
at a minimum, (1) a review of the current compensation systems, schedules,
and work rules applicable to DC government employees, (2) a review of the
best practices of state and local governments and other appropriate
organizations regarding compensation systems, schedules, and work rules, (3)
a proposal for simplifying the systems, schedules, and rules applicable to
DC government employees, and (4) the development of strategies for
implementing the proposal, including the identification of any statutory,
contractual, or other barriers to implementing the proposal and an estimated
time frame for implementation.
Second, the Appropriations Act required the contractor to submit the plan to
the Mayor and to the committees on appropriations of the House of
Representatives and the Senate.
Third, the act required the Mayor to develop a proposed solicitation within
90 days after enactment and submit a copy of the proposed solicitation to
the Comptroller General at least 90 days before its issuance.
Fourth, the act provided that within 45 days after receipt of the proposed
solicitation, the Comptroller General must review the solicitation to ensure
that it adequately addresses all of the required elements and report on the
results to the committees on appropriations of the House and the Senate.
The conference report for the Appropriations Act indicated that the
conferees expected the District government to supplement the $250,000
appropriated, if necessary, with local funds, and that the Mayor would
allocate the contract costs as he deemed appropriate. 1
District Government No Longer Plans To Use Funds
Because the Appropriations Act required the Mayor to develop the proposed
solicitation within 90 days after the act?s enactment (i. e., by February
20, 2001), we began checking with the DC Office of Personnel in late
February 2001 to determine whether the proposed solicitation had been
developed. In early March 2001, officials from the Office of Personnel told
us that the District government did not plan to develop a solicitation.
Instead, they said the District planned to use the funds to help pay the
costs associated with existing contracts related to human resources reform
initiatives that had been started before the Appropriations Act was passed.
They said
1 H. R. Rep. No. 106- 1005, at 54- 55 (2000).
GAO- 01- 690R DC Compensation Simplification Page 3 the DC Office of
Personnel began to rethink its civil service classification and
compensation systems in 1999, and that the language in the Appropriations
Act was based on an erroneous assumption that nothing was being done to
improve the condition of the District?s human resource management system.
Therefore, one official said, the appropriators were trying to provide ?seed
money? to initiate a process that had already begun.
The officials said that the goals of their contracting initiative were
substantively similar to the goals delineated in the Appropriations Act.
They provided us with a copy of the June 26, 2000, request for proposals
(RFP) that led to the existing contracts. The RFP stated that the DC Office
of Personnel ?seeks a contractor to assist with a variety of workforce
initiatives including the redesign of its compensation and classification
system and its collective bargaining agreements,? and stipulated a minimum
(40 work hours) and a maximum ($ 900,000) requirement under the contract.
Particular requirements delineated in the RFP included (1) a compensation
analysis comparing the cost and competitiveness of employee compensation in
various occupational groups with other governments and with other employers
in the Washington, D. C., area and elsewhere, (2) benchmarking and best
practices research looking for successful practices in the public or private
sectors that can be used as models or guides, and (3) assisting management
in the development of implementation plans and strategies.
On March 23, 2001, we met with the Director of the DC Office of Personnel
and other DC government officials to discuss the District government?s
actions in response to the requirements in the Appropriations Act. At that
meeting, the officials again told us that the District government planned to
use the $250,000 to pay for tasks pursuant to existing contracts related to
its human resources reform initiatives and did not plan to develop a new
RFP. They said the $250,000 had been deposited in a general fund account
controlled by the Mayor, but no federal money had been spent under the
existing contracts.
The DC government officials said that ?indefinite delivery/ indefinite
quantity? contracts had been awarded in September 2000 to three firms that
submitted bids in response to the June 2000 RFP: (1) PricewaterhouseCoopers;
(2) the Segal Company, and (3) Public Financial Management, which partnered
with Fox Lawson and Star Mountain for its bid. They also said that as of
March 23, 2001, five task orders had been issued pursuant to the contracts:
(1) a preliminary assessment of the classification and compensation
practices in the District, (2) an evaluation of a possible transition to the
federal government?s classification and pay system, (3) phases I and II of a
plan to simplify District pay schedules, (4) the development of training on
rewarding high performance, and (5) the delivery of training on rewarding
high performance. They said that three other task orders had been developed
but not issued for (1) phase III of the plan to simplify District pay
schedules, (2) the development of a classification and compensation
strategy, and (3) the identification and review of best practices in
classification, compensation, and rewards in similar governments or
organizations.
On April 2, 2001, the Director of the DC Office of Personnel sent us a
letter stating that ?we are no longer planning to use the $250,000 allocated
to us in (the Appropriations Act).? She said that her office decided not to
use the money because
GAO- 01- 690R DC Compensation Simplification Page 4 the District was further
ahead in its classification and compensation reform effort
than the functional requirements of the act contemplated, and that the
office could not fulfill the detailed requirements outlined in the act
without delaying its project. She also said that she would formally notify
Congress of the District?s plans to no longer use the money ?in a letter to
be sent later this week.?
On May 2, 2001, the Director of the DC Office of Personnel sent a letter to
a staff member of the Subcommittee on the District of Columbia, House
Committee on Appropriations, stating that ?we have decided not to use the
$250,000 allocated to us by the Congress.? The Director described the
progress that her office had made in the District?s classification and
compensation reform initiative, issuing the RFP the previous summer, signing
contracts with three firms, issuing 13 task orders pursuant to the
contracts, and gaining the support of two large labor unions. She said that
her office would lose valuable time if it stopped its work to refocus on
another procurement effort, and that it was unlikely that it could have a
new contract in place in time to responsibly spend the money allocated to
the District. However, she said her office expects to have the ?deliverables
required by the Congress? by the end of this fiscal year. Enclosed with the
letter were, among other things, the three contracts that the District had
signed as part of the initiative.
The Director?s May 2, 2001, letter to a congressional staff member did not
represent formal notification of Congress. We informed District government
officials that they should report the withholding of these funds from
obligation as either a rescission or a deferral in a manner similar to that
outlined in the Impoundment Control Act of 1974.
Agency Comments
We provided a draft of this letter to the City Administrator of the District
of Columbia for his review and comment. In a May 10, 2001, letter, the City
Administrator said that the Director of the District Office of Personnel had
informed him that she no longer planned to use the $250,000, and that he
would request the District?s Chief Financial Officer to make a formal
rescission request to Congress.
Scope and Methodology
We conducted this review by interviewing DC government officials and, where
possible, obtaining and reviewing relevant documents. We conducted this
review from February through mid- May 2001 in accordance with generally
accepted government auditing standards.
- - - - We are sending copies of this letter to Representative Constance A.
Morella, Chairwoman, and Representative Eleanor Holmes Norton, Ranking
Minority Member, Subcommittee on the District of Columbia, House Committee
on Government Reform; Senator George V. Voinovich, Chairman, and Senator
Richard J. Durbin, Ranking Member, Subcommittee on Oversight of Government
Management, Restructuring and the District of Columbia, Senate Committee on
Governmental
GAO- 01- 690R DC Compensation Simplification Page 5 Affairs; the Honorable
Anthony A. Williams, Mayor, District of Columbia, and the
Honorable John A. Koskinen, City Administrator, District of Columbia. The
letter is also available on GAO?s home page at http:// www. gao. gov. If you
have questions, please contact me or Curtis Copeland at (202) 512- 6806.
J. Christopher Mihm Director, Strategic Issues
(450023)
*** End of document. ***