. *” I I ,i’ l@ _ -- - b . ..-- COMPTROLLER GENERAL OF , WASHiNGTO I -..-. - _ -. , -.,_..* .- -. B-17260-2 - Cl Dear Mr. Brown: +fc' On March 26, 1971, you requested that the General Ac- JyJJ __ counting Office offer advice and comment on a complaint by 2 Captain Gary M. Johnson against the Aerospace Research Lab- & i oratories (ARL), Wright-Patterson Air Force Base, Ohio. $ 01: '3 Captain Johnson's allegations relate to contracts with Sys- _ .,,. 6 terns Research Laboratories, Inc., of Day%%., Ohio, for per- *' I" -' X- forming seAx.ch tasks for the Ener etics Research Laboratory (the name was changed to the Conversion Laboratory in December 1970) of ARL. Captain Johnson's original allegations pertained to a contract now terminated which were found by the Air Force Systems Command Inspector General in December 1970 to be essentially valid. As a result the Commander, ARL, was di- rected to review, correct, and improve his contractual prac- tices and relationships. We did not reexamine these allega- tions. We concentrated our examination on the practices and procedures in effect under the current contract to identify any corrective actions. Captain Johnson, in his letter to you, contended that ARL was using a contract awarded for independent research to obtain the services of technicians, draftsmen, and other skilled employees. Captain Johnson also stated that, to pre- sent the appearance of conducting independent research, the contractor routinely reported, the results of research con- ducted by Government personnel as its own. We are unable to respond to the second statement because we found that a fi- nal report under the contract is not due until 1973 and that no interim technical reports are required. , In considering the validity of the allegations, we in- terviewed Captain Johnson, Air Force personnel of the Ener- getics Research Laboratory, Air Force procurement and legal personnel, and personnel of Systems Research Laboratories, Inc. We also examined the conlract files and other related documents, including information furnished by the Air Force Systems Command Inspector General relating to his review. 50 TH ANNIVERSARY 1921- 1971 B-172602 The Price Negotiation Memorandum states that the present contract (F-33615-70-6-1515) represents a continuation of the same work ‘and effort by Systems Research Laboratories as un- der the prior 3-year contract. The period of performance is 36 months of research effort and 4 months more for a final report. The contract completion date is March 16, 1973. The contract requires both research effort and support services. The “Statement of Work” states that: I’*** The contractor shall provide the Government with the required scientific, engineering and technical support to further and enhance the ARE [Energetics Research Laboratory] research program. Most of the manhours to be expended will be in the technical support area, but it is most important that the contractor employ qualified scientific and engineering personnel to supervise and serve as liaison between the contractorfs support personnel and Government personnel. More specific require- ments for the technical support personnel are in- cluded in Section III, Other Requirements. A close ‘liaison and spirit of cooperation will have to be maintained by contractor’s personnel to ef- fect the timely exchange of information and data, the desired and required design of research appa- ratus and its instrumentation, and the planning and programming of resources for most effective use thereof. If The characterization of portions of the work as indepen- dent research or support services would not appear to be crit- ical, since the basic issue is whether the work is being performed under circumstances creating a relationship between Government personnel and contractor employees which is tanta- mount to that of employer and employee. The criteria basic to any determination of whether an individual is a Federal employee are set forth in the United States Code (5 LJIT”“c. 2lU5 (i?>‘)“:“~The same criteria are used to establish whether, under a contract, the relationship which 2 B-172602 exists between the Government and contractor employees is tantamount to that of employer and employee and thus would require that the services under consideration be obtained in accordance with Federal personnel laws. The tests determine whether the employee is --appointed in the civil service by a Federal officer or employee, --engaged in the performance of a Federal function under authority of law or an Executive act, --subject to the supervision of a Federal officer or employee while engaged in the performance of the duties of his position. In applying these criteria there is seldom any dispute as to whether the individuals are engaged in a Federal function. There may be no direct or positive appointment by a Federal officer which would formally establish an employer-employee relationship, but the presence of facts establishing the third criterion, that of detailed supervision, ordinarily will constitute evidence that such an appointment should have oc- curred. In our opinion, the evidence in this case tends to establish this sort of supervision. The Civil Service Commission has listed six elements, ’ the cumulative presence of which ordinarily will constitute the procurement of personal services proscribed by the per- sonnel laws. They are: 1. Performance is on site. 2. Principal tools and equipment are furnished by the Government. 3. Services are applied directly to integral effort of agencies or to an organizational subpart in further- ance of assigned function or mission. 3 B-172602 4. Comparable services, meeting comparable needs, are performed in the same or similar agencies using civil service personnel. 5. The need for the type of service provided can reason- ably be expected to last beyond 1 year. 6. The inherent nature of the services or the manner in which they are,provided reasonably require direct or indirect Government guidance or supervision of con- tract employees in order to --adequately protect the Government interest, --retain control of the function involved, or --retain full personal responsibility for the func- tion supported in a duly authorized Federal of- ficer or employee. In our opinion, the first five elements are evidenced, to a substantial degree, in the contractual arrangements with Systems Research Laboratories and in its operation. With re- gard to the sixth criterion-- that of the necessity for super- vision- -an effort has been made to correct the situation found by the Inspector General of the Air Force Systems Command. As written, however, the current contract affords a degree of latitude in the assignment of work which could easily permit Air Force personnel to directly supervise the work of con- tractor employees. The contract provides that: “The contractor must provide complete management capability for the performance of the,subject con- tract. The work requirements, specifying the work to be performed by the contractor, will be pre- sented to the contractor in written or verbal form. Design, development, installation, checkout and op- erational phases shall be planned and executed un- der the direction of the contractor’s supervision with specified ARE [Energetics Research Laboratory] 4 I r B-172602 coordination and approvals strictly complied with at critical points .I’ (Underscoring supplied) We noted that instructions were promulgated, following the Inspector General’s report, which prescribed the form and method for issuing formal task assignments. These instruc- tions call for the responsible Government scientists to pre- pare and include work descriptions which are complete and definitive’ enough to allow the contractor to carry out the work without Government supervision. In particular the as- signments are to spell out, as required, details of the work to be performed; to prescribe the procedures to be used; and to set forth any special data requirements. These procedures represent an attempt on the part of the Government personnel concerned to comply with their understanding of the require- ments for administering a contract on a proper task-order basis. Our review, however, indicated that the procedures failed to satisfy their intended purpose of maintaining a contractual arm’s length between the parties. The task as- signments do not appear to give a sufficiently adequate de- scription of the work to be performed to permit the contrac- tor or its employees to proceed without further direction or guidance. Some task assignments contemplate additional, yet undefined, follow-on work. One task assignment designates a particular Government employee for coordination, while others, by their terms, refer to further designation or specification of details. The contract work statement recognizes that, in the re- search environment, a responsive cooperation is required which cannot be prescribed in terms of a task assignment. It is introduced as follows: , “The inherent uncertainty of research work and pro- grams precludes setting forth a detailed descrip- tion of the work to be performed. However, the paragraphs below prescribe in some detail the re- search programs with which the contractor must 5 B-172602 interact. Many changes are expected to take place in regard to the specifics of the research but the nature of the contractor’s efforts and the close liaison that will be maintained will preclude these variations from being a problem to either the contractor or the Government. ***I’ Thus, although we found no direct evidence of actual Government supervision or control of contractor employees, we believe that such supervision is implicit in the complex char- acter of the work and in the broad fashion in which it is di- rected in the task assignments reviewed. The degree to which Government and contractor personnel apparently are physically intermingled in the laboratory, the close relationship that exists between projects and must necessarily exist among the personnel performing them, together with the fact that the contractor and many of his employees have been working in the laboratory for nearly 6 years, all contribute to the appear- ance that the contractual personnel are simply an augmenta- tion of the Government laboratory staff. The presence of all six aforementioned Civil Service Com- mission elements in such substantial degree may be viewed, in effect, as establishing a rebuttable presumption that super- vison exists. The issuance of task orders to a contractor may ordinarily serve to overcome this presumption, but, by their vagueness, the task orders in this instance appear only to contribute to the conclusion that the services acquired are still being performed under an arrangement that may well be proscribed by the personnel laws. In view of the indications of a possible violation of civil service laws and regulations, we are furnishing a copy of this letter to the Civil Service Commission for such fur- ther investigation, views, and action as it deems necessary. 6 B-172602 We are also furnishing copies to Systems Research Laborato- ries, Inc., the Secretary of Defense, and the Secretary of the Air Force. Sincerely yours, ’ ~~~~~~~~ Comptroller General of the United States The Honorable Clarence J. Brown House of Representatives 7
Allegations Relating to Contracts With Systems Research Laboratories, Inc., of Dayton, Ohio
Published by the Government Accountability Office on 1971-11-22.
Below is a raw (and likely hideous) rendition of the original report. (PDF)