oversight

Examination of Project Using Summer Interns for Programs Evaluation

Published by the Government Accountability Office on 1971-08-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

       This s a repor t                -on.work prm   I                 X
ipuruant to a reques. of the address.. whoe" nrtherailmi
I
should be obtained before furth rerlos of tsB  rept.




    Examination Of Project Using
    Summer Interns For Programs
    Evaluation            -16403,(,)



    Department of Health, Education,
     and Welfare




    BY THE COMPTROLLER GENERAL
    OF THE UNITED STATES


flLE COPy . COMP E                             9uY         , 11 ) 7 3
                ,?j
                  n
          COMPTROLLER   ENERAL OF THE UNITED STATE
                     WAsHINGTON. D.C.
                                 D1.




B-164031(1)



Dear Mr. Patman:

       This .  ur report on the Department of Health, Educa-
tion, and Welfare project using summer interns for programs
evaluation. Our examination wag made pursuant to your re-
quest of June 6, 1970.

     In accordance with arransemunents made with your office,
we are sending copies of this report to Congresswoman Edith
Green and Congressman Robert 0. Price.

      We plan to make no fur±her distribution of this report
unless copies are specifically requested, and then we shall
make distribution only after your agreement has been ob-
tained or public announcement has been made by you con-
cerning the contents of the report.

      The Department of Health, Education, and Welfare and
the contractor have rot been given an opportunity to formally
comment on this report,

                                  Sincerely yours,



                                  Acting Comptroller General
                                  of the United States

The Honorable Wright Patman
house of Representatives




              50TH ANNIVERSARY      1921-   1971
COMPTROLLER GENERAL'S                EXAMINATION OF PROJECT USING SUMMER INTERNS
REPORT TO THE                        FOR PROGRAMS EVALUATION
HONORABLE WRIGHT PATMAN              Department of Health, Education, and
ROUSE OF REPRESENTATIVES             Welfare B-164031(1)

DIGEST

WHY THE REVIEW WAS MADE

     During the summer of 1970 the Department of Health, Education, and Welfare
     (HEW) funded a project usinig summer interns to evaluate 15 of its programs.
     The project, known as the Programs Evaluation by Summer Interns project,
     was conducted by a contractor--The BLK Croup, Inc., a Washington, D.C., con-
     sulting firm--which employed 171 interns to evaluate programs in 14 loca-
     tions. At the request of Congressman Wright Patman, the General Accounting
     Office (GAO) examined into the
            --development of the project concept and the need for the project,
            --selection of a contractor,
            --legality of the contract, and
            --background of the contractor and its personnel.
     HEW and the contractor have not been given an opportunity to formally ex-
     amine and comment on this report.

FINDINGS AND CONCLUSIONS

    Purpose of project

    The project was intended to test the feasibility of using summer interns
    to evaluate the effectiveness of 15 HEW programs. (See app. II.) The
    interns were to include graduate and undergraduate students and non-
    student residents of the communities where the HEW programs were located.
    (See p. 5.)
    Selection of a contractor
    Eight firms submitted proposals for the conduct of the project. Ai HEW
    review panel screened the proposals, and as a result, HEW asked four firms
    to revise their technical proposals and to make any desired changes in
    their cost proposals.
    The firms were not notified, however, as required by the Federal Procure-
    ment Regulations, that the revised proposals would be final. GAO believes
    that this irregularity is not sufficient cause to question the vaildity
    of the resulting contract award. (See p. 18.)




     Tear Sheet                                         UG . 1 8, 1 9 7 1
Of the four revised proposals, two were determined by the panel to be ac-
ceptable. The contract was awarded to The BLK Group because it had the
lower cost proposal.
On April 10, 1970, a letter contract was awarded to The BLK Group at an
estimated total cost of $899,369. On June 23, 1970, a cost-plus-a-fixed-
fee contract was awarded instead of the contemplated fixed-price contract.
The type of contract was changed because the HEW Audit Agency questioned
certain of the estimated costs.
The PEW General Counsel informed the contracting officer that the\ 9 was
nothing illegal about such a change. GAO believes that the contracting
officer was justified, under the circumstances, in awct,ding the cost-plus-
a-fixed-fee contract. (See p. 21.)
Funding of project costs

Amendments to the contract resulted in a total estimated cost of about
$1 million. Funds aporopriated to evaluate each of the 15 programs were
used to finance the project.
GAO believes that the legal authorities for expenditure of these funds
provided a statutory basis for financing the project. (See p. 10.)
Evaluations of the project
    BLK Group evaluation

The BLK Group report recommended that HEW regain some measure of delegated
responsiblity for its programs, rather than leave supervision, enforcement,
and technical assistance largely to local and State agencies.
The report stated that using summer interns to evaluate programs was not
only feasible but also potentially practical, economical, and valuable to
HEW officials. (See p. 24.)
    HEW evaZluation

The HEW project staff found that the project, if refined and expanded,
would provide program managers with up-to-date information on the op-
eration of HEW programs.
Because the project had been closely monitored by HEW during the summer,
the HEW staff did not recommend a separate evaluation of the 1971 project
by a contractor. Such an evaluation was made of the 1970 project by Abt
Associates, Inc. (See p. 24.)
    Abt Associates evaZuation

Abt Associates conducted its evaluation under a $29,097 fixed-price con-
tract.


                                   2
The contract was awarded by HEW on a sole-source basis because the presi-
dent of Abt Associates _s familiar with the project. He had assisted HEW
in preparing the request for proposals for the project and had also been a
member of the proposal review panel.
GAO, however, believes that the president's prior involvement with the
project did not necessarily qualify Abt Associates to evaluate the proj-
ect. Other companies should have been solicited to compete with the Abt
proposal. (See p. 25.)
The Abt Associates report stated that the project seemed to demonstrate
that student interns were capable of carrying out field evaluations of
programs. The report indicated that by making certain improvements in
the project and by concentrating on fewer programs a more cost-effective
means of evaluation might be achieved than would be possible by using
alternative methods of evaluation. The report stated further that if the
project were continued in 1971 at approximately the same level and by the
same contractor as in 1970, it would result in a lack of useful evaluation
data simnilar to the 1970 project. (See p. 26.)
Continuation of the project

On April 26, 1971, HEW entered into a contract with the Small Business
Administration to conduct the 1971 project under a subcontract with The
BLK Group. The cost-plus-a-fixed-fee subcontract with The BLK Group pro--
vided for using about 67 interns to evaluate nine HEW programs, at an esti-
mated cost of $502,900.
Small Business Administration officials informed GAO that this contracting
arrangement was made pursuant to section 8(a) of the Small Business Act
(15 U.S.C. 637) which authorizes the agency, in fulfilling contracts with
other Federal agencies, to subcontract with small business firms not yet
able to compe'e effectively in the marketplace.
The contract files showed that HEW informed the Small Business Administra-
tion in January 1971 that it would award the contract to the agency condi-
tional upon The BLK Group qualifying for section 8(a) subcontracts and
being approved for the subcontract. (See p. 28.)
The HEW program groups responsible for the operation of the 15 programs
evaluated under the 1970 project had not completed their review of ' e
BLK Group report at the time the 1971 contract was awarded to the Small
Business Administration.
GAO believes that comments of the HEW groups should have been obtained and
that the comments and The BLK Group report should have been fully evaluated
before a contract to continue the project in 1971 was awarded. (See p. 28.)




Tear Sheet                        3
BLK Group kty personne l

The BLK Group was incorporated on March 26, 1969. In May 1970 it had 25
employees, 10 of whrmn were assigned to the project. The persons employed
by The BLK Group appeared to possess the education and experience neces-
sary to perform the type of work required by the contract. (See pp. 9
and 30.)




                                    4
                           Contents


DIGEST                                                     1

CHAPTER

   1       INTRODUCTI ON                                   5

   2       DEVELOPMENT AND LEGALITY OF PEBSI PROJECT       7
               Development of PEBSI concept                7
               Legality of PEBSI project                  10
                   Conclusion                             10

   3       CONTRACTUAL ARRANGEMENTS FOR CARRYING CUT
           PSBSI PROJECT                                  11
               Request for proposals for a contract
                 for PEBSI project                        11
               Selection of contractor                    15
                   Conclusion                             18
               HEW Audit Agency review of proposed
                 costs                                    19
               Change from contemplated fixed-price
                 contract to cost-plus-a-fixed-fee con-
                   tract                                  21
                   Conclusion                             21
               Contract modifications and cost            21

   4       RESULTS, EVALUATION, AND CONTINUATION OF
           PEBSI PROJECT                                  24
               Results of PEBSI project                   24
               Contract for evaluation of PEBSI project   25
                   Conclusion                             25
               Report on PEBSI evaluation                 26
               Award of 1971 PEBSI contract               27
                   Conclusion                             28

   5       BACKGROUND OF PRINCIPAL CONTRACTOR PERSONNEL   29
               Conclusion                                 30

APPENDIX

   I       Letter dated June 6, 1970, irom Congressman
            Wright Patman to the Comptroller General      33
APPENDIX                                                  Page

      II   Schedule of source of funds for the project
             and programs evaluated during PEBSI proj-
               ect                                         35

                         ABBREVIATIONS

BLK        The BLK Group, Inc.

GAO        General Accounting Office

HEW        Department of Health, Education, and Welfare

PEBSI      Programs Evaluaticn by Summer Interns

SBA        Small Business Administration
COMP?.ROLLER GENERAL'S              EXAMINATION OF PROJECT USING SUMMER INTERNS
REPORT TO THE                       FOR PROGRAMS EVALUATION
HONORABLE WRIGHT PATMAN             Department of Health, Education, and
HOUSE OF REPRESENTATIVES            Welfare B-164031(1)


DIGEST

WHY THE RbYVIEW WAS MADE

     During the summer of 1970 the Department of Health, Education, and Welfare
     (HEW) funded a project using summer interns to evaluate 15 of its programs.
     The project, known as the Programs Evaluation by Summer Interns project,
     was conducted by a contractor--The BLK Group, Inc., a Washington, D.C., con-
     sulting firm--which employed 171 interns to evaluate programs in 14 loca-
     tions. At the request of Congressman Wright Patman, the General Accountiltg
     Office (GAO) examined into the
            --development of the project concept and the need for the project,
            --selection of a contractor,
            --legality of the contract, and
            --background of the contractor and its personnel.
     HEW and the contractor have not been given an opportunity to formally ex-
     amine and comment on this report.

FINDINGS AND CONCLUSIONS

       'urpose of project

      The project was intended to test the feasibility of using summer interns
      to evaluate the effectiveness of 15 HEW programs. (See app. II.) The
      interns were to include graduate and undergraduate students and non-
      student residents of the communities where the HEW programs were located.
      (See p. 5.)
      Selection of a contractor

      Eight firms submitted proposals for the conduct of the project. An HEW
      review panel screened the proposals, and as a result, HEW asked four firms
      to revise their technical proposals and to make any desired changes in
      their cost proposals.
      The firms were not notified, however, as required by the Federa' Procure-
      ment Regulations, that the revised proposals would be final. GAO believec
      that this irregularity is not sufficient cause to question the vaildity
      of the resulting contract award. (See p. 18.)




                                        I
Of the four revised proposals, two were determined by the panel to be ac-
ceptable. Tlie contract was awarded to The BLK Group because it had the
lower cost proposal.
On April 10, 1970, a letter contract was awardeJ to The BLK Group at an
estimated total cost of $899,369. On June 23, 1970, a cost-plus-a-fixed-
fee contract was awarded instead of the contemplated fixed-price contract.
The type of contract was changed because the HEW Audit Agency questioned
certain of the estimated costs.
The HEW General Counsel informed the contracting officer tuat there was
nothing illegal about such a change. GAO believes that the contracting
officer was Justified, under the circumstances, in awarding the cost-plus-
a-fixed-fee contract. (See p. 21.)
?undinS of project costs
Amendments to the contract resulted in a total estimated cost of about
$1 million. Funds appropriated to evaluate each of the 15 programs were
used to finance the project.
GAO believes that the legal authorities for expenditure of these funds
provided a statutory basis for financing the project. (See p. 10.)
Evaluations of the projeot
    BLK Group evaZuation

The BLK Group report recommended that HEW regain some measure of delegated
responsiblity for its programs, rather than leave supervision, enforcement,
and technical assistance largely to local and State agencies.
The report stated that using summer interns to evaluate programs was not
only feasible but also potentially practical, economical, and valuable to
HEW officials. (See p. 24.)
    HEW evaZuation
The HEW project staff found that the project, if refined and expanded,
would provide program managers with up-to-date information on the op-
eration of HEW programs.
Because the project had been closely monitored by HEW during the sumner,
the HEW staff did not recommend a separate evaluation of the 1971 project
by a contractor. Such an evaluation was made of the 1970 project by Abt
Asseciates, Inc. (See p. 24.)
    Abt Associates evaluation

Abt Associates conducted its evaluation under a $29,097 fixeJ-price con-
tract.


                                  2
The contract was awarded by 1HE' on a sole-source basis because the presi-
dent of Abt Associates was familiar with the project. He had assisted HEW
in preparing the request for proposals for the project and had also been a
member of the proposal review panel,
GAO, however, believes that the president's prior involvement with the
project did not necessarily qualify Abt Associates to evaluate the proj-
ect. Other companies should have been solicited to compete with the Abt
proposal. (See p. 25.)
The Abt Associates report sta" d that the project seemed to demonstrate
that student interns were capable of carrying out field evaluations of
programs. The report indicated that by making certain improvements in
the project and by concentrating on fewer programs a more cost-effective
means of evaluation might be achieved than would be possible by using
alternative methods of evaluation. The report stated further that if the
project were continued in 1971 at approximately the same level and by the
same contractor as in 1970, it would result in a lack of useful evaluation
data similar to the 1970 project. (See p. 26.)
Continuation of the project

On April 26, 1971, HEW entered into a contract with the Small Business
Administration to conduct the 1971 project under a subcontract with The
BLK Group. The cost-plus-a-fixed-fee subcontract with The BLK Group pro-
vided for using about 67 interns to evaluate nine HFW programs, at an esti-
mated cost of $502,900.
Small Business Administration officials informed GAO that this contracting
arrangement was made pursuant to section 8(a) of the Small Business Act
(15 U.S.C. 637) which authorizes the agency, in fulfilling contracts with
other Federal agencies, to subcontract with small business firms not yet
able to compete effectively in the marketplace.
The contract files showed that HEW informed the Small Business Administra-
tion in January 1971 that it would award the contract to the agency condi-
tional upon The BLK Group qualifying for section 8(a' subcontracts and
being approved for the Rubcontract. 'See p. 28.)
The HEW program groups responsible for the operation of the 15 programs
evaluated under the 1970 project had not completed their review of The
BLK Group report at the time the 1971 contract was awarded to the Small
Business Administration.
GAO believes that comments of the HEW groups should have been obtained and
that the comments and The BLK Group report should have been fully evaluated
before a contract to continue the project in 1971 was awarded. (See p. 28.)




                                  3
BLK Group key pereonnel

The BLK Group was incorporated on March 26, 1969. InMay 1970 it had 25
employees, 10 of whom were assigned to the project. The persons employed
by The BLK Group appeared to possess the education and experience neces-
sary to perform the type of work required by the contract. (See pp. 9
and 30.)




                                   4
                         CHAPTER 1


                       INTRODUCTION

     Pursuant to a request dated June 6, 1970, from Congress-
man Wright Patman (see app. I), we reviewed certain aspects
of the Programs Evaluation by Summer Interns (PEBSI) project
sponsored by the Department of Health, Education, and Wel-
fare. The office of the Deputy Assistant Secretary for Eval-
uation and Monitoring, HEW, was assigned administrative re-
sponsibility for the project, and The BLK Group, Inc., (BLK),
a Washington, D.C., based consulting firm, conducted the
project work under an HEW contract at an estimated cost of
about $991,000.

     In accordance with arrangements made with Congress-
man Patman's office, we obtained information on the selec-
tion and background of the contractor and the activities to
be carried out under the contract, and we examined into the
legal basis for the award of the contract.

     We examined the HEW records pertaining to the selection
of the contractor and the operation and certain financial
aspects of the project, and we met with HEW and BLK offi-
cials to obtain background data and certain other informa-
tion about the project. We did not evaluate the contractor's
performance under the contract.

     The PEBSI project was designed to test the feasibility
of using summer interns in the evaluation of the effective-
ness of HEW programs. The interns were to include graduate
and undergraduate students and nonstudent residents of the
communities in which the HEW programs to be evaluated were
located. HEW selected 15 programs to be evaluated and
funded the PEBSI project from funds appropriated for the
evaluation of these programs. (See app. II.)

     In conducting the project the contractor hired 171
summer interns. The HEW programs evaluated by the interns
were located in Albuquerque, New Mexico; Atlanta, Georgia;
Boston, Massachusetts; Cleveland, Ohio; Los Angcles, Cali-
fornia; New York, N.Y.; and Washington, D.C.; and in
Maricopa County, Arizona; San Joaquin County, California;
Cumberland County, New Jersey; Dade County, Florida; Berrien


                              5
County, Michigan; Hildago County, Texas; and Sandusky
County, Ohio. Counties with heavy concentrations of migra-
tory farm workers (migrants) were selected. HEW decided to
operate the PEBSI project in some migrant areas because no
evaluation had been conducted by the Federal Government on
the effect of the HEW programs on migrants.




                            6
                          CHAPTER 2


         DEVELOPMENT AND LEGALITY OF PEBSI PROJECT

DEVELOPMENT OF PEBSI CONCEPT

     The PEBSI project originated from a proposal submitter
to the Under Secretary of HEW on September 16, 1969, by a
summer employee on his staff. The employee's proposal in-
dicated that student unrest in recent years had teen caused,
in part, by- the students' belief that established channels
for implementing change were not responsive to the ideas or
participation of the young. Also the proposal pointed out
that, although evaluations of programs conducted within an
organization might be biased by past experiences of the
evaluator, evaluations conducted by an outside organization
could be hampered by a lack of familiarity with the organi-
zation. The proposal stated therefore that both approaches
to evaluation appeared to have inherent weaknesses that de-
tracted frcm the effectiveness of the end product.

     The employee said that, by involving young people in
an effectiveness evaluation of the HEW programs, HEW could
serve the dual purposes of providing necessary evaluation
by an outside group working inside the Department and of
providing opportunities for youth to effectively participate
in solving some very serious social problems confronting the
Nation.

     The summer employee proposed a project which would em-
ploy 25 interns at a total cost of about $93,500 and con-
cluded that the cost of such a project would be rather small
compared with the benefits that might result.

      In October 1969 a project officer was designated in the
office of the Deputy Assistant Secretary for Evaluation and
Monitoring to develop the employee's idea into a workable
project. We were informed by the project officer that,
while developing the project, he examined into the operations
of 18 or 19 Government-funded intern projects to become
aware of their strengths and weaknesses and that he con-
tacted various people in HEW for their opinions and sugges-
tions.



                               7
     The Deputy Assistant Secretary stated that the exami-
nation showed that HEW program managers were not satisfied
with the results of prior intern projects because the goals
were not realistic and the project operations were not ade-
quately monitored. He said that HEW had tried to structure
the PEBSI project to provide for adequate management, tech-
nical support, and monitoring, to ensure that the project
would be a success.

     The project officer told us that he had decided that
the project would need a group of interns with a variety of
skills who could successfully relate to the communities ih
which they would be wozking. For this reason he decided
that the group of interns should include graduate and under-
graduate students and nonstudent residents of the communi-
ties involved.

      The project officer told us also that, in designing
the project, he had initially thought it should include an
evaluation of only five or six programs and be conducted in
several of the HEW regions, to preclude any accusation of
regionoal bias in the final report.

     The Deputy Assistant Secretary told us that HEW wanted
to test the concept of using interns in the evaluation of
as many different types of programs as possible. He also
pointed out that the sensitivities of managers of programs
selected for evaluation would naturally be aroused and that,
unless several programs were reviewed, these managers would
believe they were being singled out.

     The project officer estimated that it would cost be-
tween $500,000 and $1,000,000 to conduct the proposed proj-
ect. HEW decided to use a portion of the funds appropriated
ror the evaluation of 15 HEW programs and to evaluate the
programs in several of the HEW regions. To conduct such a
project, the project officer estimated that 100 to 150 in-
terns would be needed. These decisions, however, were not
based on any data obtained from a formal study.

     With regard to the selection of sites at which the 15
programs would be evaluated, the Depucy Assistant Secretary
told us that HEW had selec ed sites which would give the
PEBSI project a broad geographical representation. In ad-
dition, he said that HEW had made an effort to select cities


                             8
involved in the Model Cities program of the Department of
Housing and Urban Development because these were areas in
which HEW programs were particularly abundant. The Model
Cities program is an attempt to coordinate and concentrate
Federal, State, and local resources in designated slum and
blighted areas to substantially improve the living condi-
tions and general welfare of the residents.

     The project officer told us that originally the eval-
uEtions were to have been conducted in cities and in rural
areas; but when it became evident that only large cities
were operating all or most of the programs to be evaluated,
the idea of evaluating programs in rural areas had been
dropped. He said that HEW had decided to evaluate programs
in areas with high concentrations of migrant workers.

     The project officer decided that the project should
employ 150 interns to evaluate the 15 HEW programs. Eval-
uations would be conducted in seven cities and in certain
areas with high concentrations of migrants.

     The Deputy Assistant Secretary informed us that, be-
cause the PEBSI project would be in operation for less than
a year, it would have been difficult to build up an appro-
priate professional staff within HEW to conduct the project.
Also the project officer told us that inadequate management
of some of the previously conducted intern projects which
he had reviewed had resulted from using regular staffs to
direct the piojects, in addition to their normal duties.
For these reasons HEW officials decided to employ a contrac-
                                   '
tor to conduct the PEBSI project.

     HEW awarded a contract to BLK on April 10, 1970, at an
estimated cost of $899,369. Modifications made to the con-
tract increased the estimated cost to $991,065. BLK is a
firm of management consultants in the field of human prob-
lems and principally specializes in the areas of transpor-
tation; social protlems, such as juvenile delinquency, wel-
fare health services, and day care; staff training; and
legislative matters. The firm was incorporated on
March 26, 1969, aPd in May 1970 it had 25 employees, 10 of
whom were assignee to the PEBSI project. The final volume
of the firm's report on the project results was submitted
to HEW on January 8, 1971.



                              9
LEGALITY OF PEBSI PROJECT

     Material prepared by HEW and furnished to us by Con-
gressman Patman included F schedule of the source of funds
for the PEBSI project, which showed that $950,000 would be
needed to finance the project. Other material was furnished
which made reference to the views of the National Education
Association that the contract for the project was entered
into without proper authority, without justifiable cause,
and in violation of the intent of the Congress.

     We have revised the funding schedule supplied to us by
Congressman PatmEn, to include the funding for all contract
modifications and to include the citations to the legal
authority to expend these funds for program evaluations.
(See app. II.) We examined each of the authorities cited
and in our opinion they provide a statutory basis for pro-
gram evaluations such as the PEBSI project.

     An official of the National Education Association in-
formed us that the statement that the contract for the proj-
ect was entered into without proper authority was based on
the wording of the Senate version of a bill which, in sev-
eral sections, would have given authority to contract for
the evaluation of elementary and secondary education pro-
grams to the Commissioner of Education, rather than to the
Secretary of HEW. When enacted into law as Public Law 91-
230, however, the evaluative authority was given to the
Secretary.

Conclusion

     The legal authorities for expenditure of these funds
provided a statutory basis for financing the project.




                             10
                         CHAPTER 3


               CONTRACTUAL ARRANGEMENTS FOR

                CARRYING OUT PEBSI PROJECT

     Under the contract awarded in April 1970, BLK was to
conduct evaluations of 15 HEW programs, using 150 summer
interns in the evaluative process. Evaluations were to be
conducted in seven cities and seven counties across the Na-
tion. BLK was to iecruit the interns; familiarize them with
the HEW programs; and train them in program evaluation
processes, including observation techniques, data organiza-
tion, report writing, and measurement of changes effected
by the programs.

     The interns were to conduct interviews with users,
nonusers, and operators of the HEW programs; gather certain
statistical data; make observations on program operations;
organize the various types of information collected; and
participate in an analysis of the effectiveness of the pro-
grams they had reviewed, basing their findings on data they
had collected and observations they had made. Further data
analysis was to be do-         ,ashington BLK headquarters
by experienced analys.-

     The final report of BLK was to provide an evaluation
of the 15 HEW programs reviewed and a self-assessment of
the PEBSI project. Also as a part of the final report, a
color film suitable for national television presentation
was to be submitted, showing the operations and goals of
some of the HEW programs which had been evaluated.

     We reviewed HEW's selection of BLK to conduct the PEBSI
project and the procedures used in awarding the contract.
These topics are discussed in the following sections.

REQUEST FOR PROPOSALS FOR
A CONTRACT FOR PEBSI PROJECT

     On December 10, 1969, the office of the Assistant Sec-
retary for Planning and Evaluation secured the services of
Abc Associates, Inc., to prepare specifications to be in-
cluded in a request for proposals for a contract to be


                               11
awarded for the design and implementation of the PEBSI proj-
ect. Abt Associates is a Cambridge, Massachusetts, consult-
ing firm specializing in economic and educational research.
The firm has had contracts with the Departments of Labor,
Transportation, and HEW; the Office of Economic Opportunity;
the Government of Canada; and with various municipalities.
The services of Abt Associates were obtained under a pur-
chase order in the amount of $2,495 for the period Decem-
ber 10 through December 31, 1969.

     The Deputy Assistant Secretary for Evaluation and Mon-
itoring told us that he had decided to hire Dr. Clark Abt,
president of Abt Associates, to prepare the specifications
to be included in the request for proposals because Dr. Abt-
had the technical expertise to prepare a request for pro-
posals which would protect HEW's interest and because he
was capable of estimating the cost of various tasks which
were to be considered for inclusion in the request for pro-
posals. The Deputy Assistant Secretary said that time was
a factor and that, unlike HEW personnel who had other pri-
orities, Dr. Abt could devote his full time to preparing the
request for proposals. He said also that the fee of $2,495
was agreed upon because time was of the essence and that
purchases under $2,500 were subject to the simplified small
purchase procurement regulations (41 CFR 1-3.600) which per-
mitted oral solicitation of bids.

     On February 9, 1970, a request for proposals for a
contract for the PEBSI project was announced in the Cou-
merce Business Daily, a publication in which prospective
Government contracts are advertised so that interested
parties can obtain a copy of the request for proposals.
To ensure an adequate response to the request for proposals,
HEW sent announcements to 15 firms which had filed state-
ments of their capabilities with HEW and which the project
officer thought might be interested in submitting a proposal
for the project. The request for proposals listed the fol-
lowing six objectives for the PEBSI project.

     1. Evaluate the effectiveness of a range of HEW pro-
        grams, using summer interns to conduct the evalua-
        tions.

     2. Produce a self-assessment of the PEBSI project, in-
        cluding an evaluation of the effectiveness of the


                             12
        interns as information gatherers and analysts and
        an assessment of the feasibility and effectiveness
        of a permanent and expanded summer intern project.

     3. Educate and motivate the summer interns.

     4. Contribute to public understanding and opinion of
        the HEW programs.

     5. Produce a report representing the findings, conclu-
        sions, and recommendations resulting from the evalu-
        ations conducted by the interns.

     6. Submit the interns' evaluations to the operators of
        the programs evaluated to see how they perceive
        evaluation accuracy, comprehensiveness, clarity, and
        feasibility; then send follow-up letters to interns
        to get their responses on the criticisms of their
        efforts. Examine the frequency of specific criti-
        cisms on both sides and assess the criticisms.

      The request for proposals stated that (1) consideration
would be given to technical proposals as well as to price
in the award of the contract and (2) the Government re-
served the right to make an award to other than the low of-
feror, to make multiple awards or to not make an award, and
to make an award without further discussion of'the proposals
submitted. The request stated also that both the price and
the technical proposals submitted should be the most favor-
able the offeror could propose to the Government. It stated
further the weights that would be given to the principal
areas (training, reporting, program management, field opera-
tions, etc.) of the proposals during HEW's evaluation of
them.

     After the requests for proposals were sent out, a con-
ference was held with prospective contractors to allow
them to ask questions on any part of the request for pro-
posals which was not clear to them. According to the min-
utes of the conference, a prospective contractor asked
whether HEW had definitely determined that a fixed-price
contract would be awarded, as indicated in the request for
proposals, or whether it was possible that a cost-
reimbursable contract would be awarded. The HEW represen-
tative told him that HEW anticipated awarding a fixed-price


                             13
contract at that time but that HEW was not completely bound
to do so.

     In answer to a question from another prospective con-
tractor whether the price of the contract would be negoti-
able, the HEW representative replied that the cost propos-
als would not be opened until the HEW technical evaluation
was completed, at which time there might be an award with-
out further discussion or there might be negotiation. In
answer to another question, he said that HEW had certain
preconceived ideas as to the cost of the project but that
this information could not be revealed to the prospective
contractors.




                             14
SELECTION OF CONTRACTOR

      Eight firms submitted proposals in response to HEW's
request for proposals. To select the most qualified pro-
posals, a review panel was formed by HEW to evaluate the
eight proposals. The panel consisted of 13 evaluators:
two from the HEW Office of Child Development; one from the
Office of Education; one from the HEW Center for Community
Planning; one from the office of the HEW Assistant Secretary
for Planning and Evaluation; one from the Department of
Labor; and seven outside consultants, including Dr. Abt who
had prepared the specifications for the request for pro-
posals. According to the project officer, the individuals
selected to be members of the panel had either been on such
a panel before or had been involved in the operation of pro-
grams similar to the PEBSI project.

     The proposal review panel met during March 12 through
March 14, 1970. The panel members rated eacheof the eight'
proposals, weighting each component of the proposals in ac-
cordance with the criteria shown in the request for propos-
als. A firm could get a maximum score of 100 points. The
records kept by the proposal review panel show that 12 of
the 13 panel members' average scores for each of the eight
firms submitting proposals were as follows:

                 Firm               Score
                  A                 69.26
                  B                 67.60
                  BLK               66.15
                  C                 63.45
                  D                 53.95
                  E                 45.54
                  F                 43.08
                  G                 20.31
     The records did not indicate nor could HLW officials
tell us why the 13th panel member did not participate. The
records show that the panel members found no one proposal
technically acceptable to satisfy all phases of the project;
but records of a discussion among the 12 panel members indi-
cate that seven of them would have preferred having firm B
conduct the project, if they had to select one firm to do
it. Four of the members said that none of the firms seemed


                            15
capable and one of them stated that firm A should conduct
the project. The records show also that the majority of the
panel members were in favor of awarding the contract to a
combination of two or three firms.

     The project officer informed us that HEW had decided
against the panel's suggestion that the contract be awarded
to a combination of firms because a combined award would
have been a major change from the intent of the request for
proposals and because it would have been difficult to choose
the firm that would have had responsibility for overall di-
rection and coordination of the project.

     The contracting officer for the PEBSI project advised
us that the panel recommended that four firms, whose pro-
posals were judged to be responsive but weak in certain as-
pects, be asked to strengthen their proposals in the speci-
fied areas. He added that, since none of the proposals ap-
peared to be particularly acceptable--even though seven
panel members preferred having firm B conduct the project
if the panel had to select one firm to conduct it--he thought
it would be beneficial to the Government to conduct negotia-
tions with the four firms to obtain better proposals.

     At negotiation. conferences on March 18, 1970, the
four firms were notified of the areas in which each of
their technical proposals was judged to be weak. These
areas included intern recruiting and training, data analy-
sis, and field operations. The contracting officer told us
that, at the time the four firms were asked to strengthen
their technical proposals, they were also informed that
they could make any changes they wanted in their cost pro-
posals. He said, however, that the firms were not informed
that such proposals would be final. He said also that,
when these firms were asked to strengthen their technical
proposals and to make any desired changes in their cost pro-
posals, they should have known that they were among the
final firms being considered, even though they would not
have known how many firms they were competing with at that
point.

     The proposal review panel met again on March 30, 1970,
to review the revised proposals submitted by the four firms.
At that time only eight of the 13 panel members were pres-
ent. Although few records were kept on the proceedings at

                             16
this meeting, a final tally of votes was maintained which
indicated the acceptability or unacceptability of the pro-
posals. According to the file, the eight panel members
voted as follows:

      Firm      Acceptable    Undecided     Unacceptable
      B              6             1              1
      BLK            3             1              4
      D              1             1              6
      A              1             0              7
     The revised proposals were also sent to four addi-
tional panel members, who voted as follows:

     Firm       Acceptable    Undecided     Unacceptable
      B              3             0              1
      BLK            4             0              0
      D              1             0              3
      A              1             0              3
Thus nine panel members found firm B's revised proposal ac-
ceptable and two found it unacceptable; seven found BLK's
revised proposal acceptable and four found it unacceptable.

     On April 1, 1970, the contracting officer was notified
that the panel had determined that firm B and BLK, in that
order of preference, had acceptable proposals. When the
cost proposals were subsequently opened it was found that
the proposals of the four firms were:

              Firm                     Amount
               A                  $862,733.00
               BLK                 899,369.00
               D                   916,633.00
               B                   993,619.58
The contracting officer stated that, because BLK's cost
proposal was lower than that of firm B, HEW awarded a let-
ter contract to BLK on April 10, 1970, at an estimated
cost of $399,369.




                             17
     With regard to the weight given to the cost component
in HEW's evaluation of the various proposals, the request
for proposals stated that:

     "Offerors are advised that paramount consider-
     ation shall be given to the evaluation of tech-
     nical proposals, as well as price, in the award
     of a contract her-under."

HEW, however, reserved the right to award the fEBSI con-
trac.t to other than the low offeror.

      The contracting officer to"' us that, subsequent to
opening the cost proposals, he I contacted the HEW Audit
Agency regarding the possibili ~ f its conducting a re-
view of the proposed costs of uoth BLK and firm B. He
said that the Audit Agency estimated that it would take
about 2 weeks to complete such a review, and he said also
that negotiations would take another week. This would
have resulted i. the contract not being awarded until the
end of April, at which time it would have been too late to
organize the project for operation that surfer. The proj-
ect officer stated that he had decided against postponing
the project for a year because the project was to provide
needed information and because funds which were available
for the project in 1970 might not be available at a later
date.

     With regard to the failure to notify the four firms
that their revised proposals would be final, the Federal
Procurement Regulations (41 CFk 1-3.805-1(b)) state that
all offerors selected for negotiation:

     "*** shall be informed of the specified date
     (and time if desired) of the closing of negotia-
     tions and that any revisions to their proposals
     should be submitted by that date."

Conclusion

     We can understand the need for an expeditious award
by HEW; nevertheless it appears that the offerors were
never officially informed of the closing of negotiations as
prescribed by the regulations. This procedural irregularity,



                             18
  however, did not constitute
                              sufficient cause to question
  the validity of the award
                            of the contract.
   HEW AUDIT AGENCY REVIEW OF
                                PROPOSED COSTS
        The contracting officer informed
  think it prudent to award                 us that he did not
                              a fixed-price contract without
  the benefit of a preaward
                              review of proposed costs,
  cially since there was only                             espe-
  with which to compare BLK's one other acceptable proposal
  therefore that he had awardedcost proposal. He advised us
                                   a letter contract to BLK
 April 10, 1970, not only                                    on
 contract but also to allow to  allow  BLK to begin work on the
                               the
 a cost review before committing Audit Agency time to conduct
 contract. A letter contract         HEW to the full cost of the
                                 is  used to declare the intent
 of an agency to enter into
                               a contract and authorizes
 tractor to proceed and to                                a con-
                             expend a percentage of the
 mated cost as fixed by the                               esti-
 ceed 50 percent of the totalcontracting officer, not to ex-
 The contract must be finalizedestimated cost of the contract.
 timated cost has been incurred. before 50 percent of the es-

      The letter contract specified
 to make expenditures or incur       that BLK was authorized
                                obligations, not to exceed
 $360,000, in the performance
 finalization. It provided     of the contract prior to
                                                        its
 tion of the contract begin that  negotiations for finaliza-
                            by May 4, 1970, with a target
 date of May 18, 1970.
      The HEW Audit Agency review
                                     of BLK's costs took longer
 than had been anticipated;
                             a draft report was not submitted
 to the contracting officer
 port questioned $298,040 of until June 1970. The draft re-
 Of this amount, $52,455 for the estimated cost of $899,369.
was questioned, because it salaries and fringe benefits
                            was
had paid in the past or because higher than the contractor
able to the contract; the          it was not directly charge-
were questioned because theentire   indirect costs of $58,644
                              contractor   had not submitted
the required indirect cost
                            proposal    to HEW; $]76,562 of the
subcontract costs of $268,570
lack of support for the proposedwas  questioned  because of a
                                    costs;  and $10,379 of the
proposed fee of $33,111 was
                             questioned because this amount
of the fee was based on questioned
                                      costs.




                              19
                        by  the Audit Agency was issued on com-
      The final report                            the same
           11, 1970, and included substantially       draft re-
September              that  had been included in the
ments and exceptions
port.




                                  20
CHANGE FROM CONTEMPLATED FIXED-PRICE CONTRACT
TO COST-PLUS-A-FIXED-FEE CONTRACT

     The contracting officer told us that, because expendi-
tures were approaching the limit set in the letter contract,
it became necessary to finalize the contract. He said that
because BLK and HEW could not come to an agreement on the
questioned costs he had decided that a cost-plus-a-fixed-
fee contract would be more appropriate than a fixed-price
contract. He said also that he had consulted with the HEW
Office of General Counsel, concerning the legality of chang-
ing from the type of contract contemplated in the request
for propcoals, and had been informed that there woul. be
nothing illegal in such a change.

     We noted that proposals to conduct the PEBSI project
were requested on Li.e basis of a fixed-price contract and
that it originally was intended that the letter contract
be finalized as a fixed-price contract. The contract was
finalized, however, as a cost-plus-a-fixed-fee contract.
It appears that, at the time of finalization, the contract-
ing officer was not satisfied that the contractor had fully
si ported its proposed costs and that he therefore decided
to proceed under a cost-plus-a-fixed-fee arrangement.

     On June 23, 1970, the contract was finalized as a cost-
plus-a-fixed-fee contract at an estimated cost of $899,365,
including a fixed fee of $33,111.

Conclusion

     Although HEW had contemplated awarding a fixed-price
contract, the use of a cost-plus-a-fixed-fee contract was
justified under the circumstances.

CONTRACT MODIFICATIONS AND COST

     On June 16, 1970, the first modification was made to
the letter contract. This modification provided that the
contractor could request and, subject to the contracting
officer's approval, receive advance payments totaling
$436,361, to be advanced in three payments as follows:




                            21
                   Date             Amount

               June 15, 1970        $266,299
               July 1, "              85,031
               Aug. 1, "              85,031

     The modification provided that all advance payments be
deposited in a special bank account and each withdrawal be
made by contractor's check, countersigned by the HEW cot
tracting officer. These funds could be withdrawn by the
contractor for the sole purpose of making payments for di-
rect materials and labor and for administrative and overhead
expenses required for the purposes of the contract. With
regard to advance payments, the Federal Procurement Regula-
tions (41 CFR 1-30.408) specify that, if--incident to a bid
or proposal or after an award--an otherwise qualified con-
tractor is found to require advance payments, there should
be no hesitation in recommending to the approving authority
that advance payments be established.

     The contract provided that interest on the amounts ad-
vanced be charged to BLK at a rate of 8 percent of the
daily amount outstanding. The contracting officer told us
that he had recommended the 8-percent interest rate, on the
bases of current commercial rates and the rate the Federal
Government would have had to pay to borrow funds.

     On December 18, 1970, a further modification was made
to the BLK contract whirh increased the contract costs.
Correspondence betweei BLK and HEW indicated that the in-
creased costs were due to unanticipated problems and events
including (1) use of additional personnel and added printing
costs caused by an unexpected requirement that the question-
naires to be used by the interns be reviewed by the Office
of Management and Budget, (2) hiring of 21 interns more
than specified in the contract for the program, (3) an in-
crease in the scope of the work of one subcontractor, au-
thorized by HEW, resulting in additional costs being in-
curred by the subcontractor, (4) problems in contacting and
in obtaining clearances from operators of HEW programs
prior to initiating reviews of their programs, and (5) time
spent in aiding an independent consultant hired by HEW to
review the operations of the PEBSI project.

     According to a BLK memorandum to the HEW contracting
officer, the increased costs amounted to $166,700. HEW,

                               22
however, agreed to a reduction in the requirements for BLK's
final report whereby BLK was required to provide a detailed
analysis of only five of the HEW programs reviewed and a
more general analysis of the other 10 programs. HEW agreed
also to cancel a component of the project which was to be
conducted during the fall of 1970 and which was to involve
part-time interns in evaluating and reporting on certain
education programs. This curtailment of the scope of work
reduced the estimated increase in cost by $75,000, to
$91,700, and resulted in a total estimated contract cost of
about $991,000.

     The first three volumes of the BLK four-volume final
report were presented to HEW on December 31, 1970. Accord-
ing to correspondence between BLK and HEW, the fourth volume,
ah appendix, had not been printed by December 31, due to
factors beyond BLK's control; primarily a curtailed work
schedule of printers and composers because of holidays. The
final volume was delivered to HEW on January 8, 1971.

      As of February 11, 1971, the contractor had been paid
$978,057 of the total estimated contract cost of about
$991,000. The amount paid consisted of $959,919 on vouchers
submitted by BLK, and $18,138 on outstanding advances.
Pending resolution of any exceptions taken during the final
audit, 15 percent of the BLK fee was withheld from each pay-
ment.

     The final audit of the BLK contract by the HEW Audit
Agency had been scheduled to begin on or about April 12,
1971. According to a representative of the Audit Agency,
the BLK fiscal year ended on March 31, 1971; consequently,
on April 12, BLK was not prepared for the HEW audit because
its account books were being closed.

     On April 27, 1971, a representative of the Audit Agency
told us that BLK had not submitted its final voucher to
HEW on the PEBSI project and that a starting date for the
final audit had not been established.




                            23
                           CHAPTER 4


         RESULTS, EVALUATION, AND'CONTINUATION
                     OF PEBSI PROJECT

RESULTS OF PEBSI PROJECT

     The BLK final report contained the results of the eval-
uations of the 15 HEW programs, conclusions based on these
evaluations, and a self-assessment of the PEBSI project.
PEBSI was a success according to the BLK report and showed
that college students and community people could make ex-
cellent evaluations of Government programs.

     The basic conclusion of the report was that HEW had
not given direction to its programs. The report recommended
that IIEW regain some measure of the presently delegated re-
sponsibility for its programs, rather than leave supervision,
enforcement, and technical assistance largely to local and
State agencies. The report stated that most of the HEW pro-
grams evaluated were providing services useful to those
individuals they served but that they served only a limited
number.

     The BLK report stated also that PEBSI was not only
feasible as a concept but also potentially practical, eco-
nomical, and valuable to the HEW decisionmakers at all
management levels.

     In February 1971 the HEW-PEBSI project staff prepared
a report on the project, which stated that the PEBSI proj-
ect, if refined and expanded, would provide program opera-
tors at all Federal, regional, State, and local levels
with up-to-date information on the operation of HEW pro-
grams. The HEW staff concluded that in this sense the proj-
ect in 1970 was a success. The report dealt with each
specific segment of the project and stated that, because
PEBSI was extensively monitored by HEW, a separate evalua-
tion as conducted by an HEW contractor during 1970 (see
bilow) was of doubtful value and was not recommended for the
1971 PEBSI project.




                               24
     The HEW groups responsible for the operation of the
15 HEW programs evaluated had not completed their review
of the PEBSI report at the time we completed our review in
May 1971.

CONTRACT FOR EVALUATION OF PEBSI PROJECT

     On April 15, 1970, 5 days after the letter contract
was awarded to BLK, Abt Associates submitted a proposal to
HEW for an evaluation of the PEBSI project. The Deputy As-
sistant Secretary for Evaluation and Monitoring told us that
he had decided on an independent evaluation but that he did
not want to spend more than $30,000 for it. He asked
Dr. Abt to submit a proposal because Dr. Abt was a well-
known consultant and his personal involvement would elimi-
nate the additional costs and time which would be involved
in acquainting someone new with the project.

     The Abt Associates proposal stated that the firm would
(1) make on-site visits during recruitment, selection, and
training of interns and at the start and in the middle of
the field operation, (2) make regular monthly visits to the
BLK Washington headquarters operation, and (3) submit five
monthly letter reports and a final report. HEW awarded a
fixed-price contract to Abt Associates on June 8, 1970, at
a cost of $29,097, justifying the sole-source procurement
on the basis that:

     "Because he prepared the original Request for
     Proposal for the Programs Evaluation by Summer
     Interns (PEBSI) project, and served on the Pro-
     posal Review Panel, Dr. Abt, who will be the
     principal analyst, is uniquely qualified to per-
     form the proposed contract to the advantage of
     the Government."

Conclusion

     Dr. Abt's participation in the preparation of the re-
quest for proposals and his involvement on the proposal
review panel did not necessarily give Abt Associates special
qualifications to perform the evaluation contract. In the
interest of obtaining the fullest degree of competition,
other companies should have been solicited.


                            25
REPORT ON PEBSI EVALUATION

     The Abt Associates assessment of the PEBSI project,
contained in its final evaluation report of March 1, 1971,
differed somewhat from the assessments by BLK and the HEW-
PBBSI project staff. Abt Associates stated that HEW's
first goal of recruiting,training, and mobilizing the in-
terest of promising and capable young people for HEW ser-
vice seemed to have been achieved but that the long-term
mobilization of these interns for HEW service was indeter-
minable at that time.

     The report indicated that achievement of the second
goal of improved public understanding of HEW programs ap-
peared to be inconclusive and that the third goal of in-
creasing the efficiency of program evaluations was definitely
not achieved. The report stated also that the cost of at-
taining these goals did not appear to be less than it would
have been if other known means of conducting evaluations
had been used (e.g., internal HEW staff or external con-
tractor evaluations).

     Abt Associates indicated also in its report that it
was impressed by the job performed by BLK in recruiting a
large group of interns from primarily disadvantaged minority
backgrounds and by the level of performance of most of
these interns, despite their brief and inadequate training.
Tle report concluded that the project seemed to demonstrate
that undergraduate and graduate students were capable of
carrying out field evaluations.

     With respect to continuation of the project, the report
indicated further that the deficiencies of the initial ef-
                                                       for
fort in intern training, contacting program personnel analy-
clearances, research design, and data collection and
sis could all be corrected. In addition, the report stated
that, given improvements in these areas and a greater con-
centration of interns on fewer programs in fewer locations
and with better preparation, it was possible that a PEBSI
project would show superior cost effectiveness over the
other currently available evaluation alternatives.

      The report stated further that, if the PEBSI project
 were continued at approximately the same level and by the
 same contractor in calendar year 1971 without significant

                             26
change in project content, size, or management, the 1971
project would produce an absence of useful evaluative data
similar to the 1970 project. Furthermore Abt reported that,
because of HEW's lack of a clear administrative response
to the 1970 project, the word would gradually get out to the
many potential interns and HEW staff candidates for the
project office that the project was yet another ineffectual
evaluation and the initial hope that excited a great deal
of enthusiasm in and around the project in 1970 would not
be present in 1971.

AWARD OF 1971 PEBSI CONTRACT

     An HEW official informed us that in October 1970 the
Secretary of HEW made a verbal commitment to fund a PEBSI
project in 1971. The official said that this commitment
was made by the Secretary at a conference with the PEBSI
interns and was reaffirmed in his speech before the Na-
tional Student Symposium on the Presidency in December 1970.

     In a letter dated December 9, 1970, to the HEW Director
of Field Evaluation, office of the Assistant Secretary for
Planning and Evaluation, the president of BLK made refer-
ence to the Secretary's commitment Pnd re-requested a modi-
fication to the BLK contract to allow it to continue the
PEBSI project for another year. The president stated that,
if the contract could not be modified, BLK should be al-
lowed on the basis of its performance to enter into a sole-
source contract so that work on the project could continue
without major interruption.

     HEW entered into a contract, effective April 26, 1971,
with the Small Business Administration (SBA) for the con-
duct of the 1971 PEBSI project. The contract stipulated
that BLK, as a subcontractor, would perform and fulfill all
the requirements of the contract, instead of SBA. SBA's
cost-plus-a-fixed-fee subcontract with BLK involved about
67 interns evaluating nine HEW programs, at an estimated
cost of $502,900.

     SBA officials informed us that this contracting ar-
rangement was made pursuant to section 8(a) of the Small
Business Act which authorizes SBA to subcontract with small
business firms for the performance of SBA contracts with
other Federal agencies. SBA regulations state that the


                               27
purpose of awarding such subcontracts is to assist small
business firms not yet able to compete effectively in the
marketplace. The contract files showed that HEW had in-
formed SBA in January 1971 that it would award the contract
to SBA conditional upon BLK's qualifying for section 8(a)
subcontracts and being approved for the subcontract.

     An SBA official informed us that BLK was approved as
a section 8(a) subcontractor on the basis of the determi-
nation that BLK had not attained the goal of self-
sufficiency. He stated that this determination was based
primarily on the firm's financial position and lack of
experience in business.

Conclusion

     The Abt Associates final evaluation report was criti-
cal, in part, of the PEBSI project but pointed out that
with certain changes the project could become successful.
The BLK report and the HEW-PEBSI project staff report both
generally disagreed with the Aht Associates evaluation of
the project and stated that 'he PEBSI project was a success.
HEW recently requested its operating groups, responsible
for the 15 programs evaluated by BLK, to comment on the
BLK report. A contract was entered into for a 1971 PEBSI
project, however, without benefit of these comments.

     Comments from the HEW groups responsible for the 15
programs should have been obtained and the comments and the
BLK report should have been fully evaluated before a con-
tract was awarded for a 1971 PEBSI project.




                              28
                          CHAPTER 5


       BACKGROUND OF PRINCIPAL CONTRACTOR PERSONNEL

     In accordance with Congressman Patman's request, we
obtained background information on the BLK key personnel.
The information which we obtained follows.

     The president of BLK has a bachelor's degree from Roo-
sevelt University in Chicago, Illinois, and is a specialist
in programs for economic and manpower development. He has
served as a manpower development and training specialist
for the Department of Labor and has supervised work on the
development and evaluation of educition, housing, child
care, and economic development programs of migrants and
seasonal farm workers for the Office of Economic Opportunity.
He had been with another private consulting firm for 3 years
prior to the establishment of BLK.

     The vice president of BLK has a master's degree in
sociology and has completed the course work for a doctorate
degree at the University of Chicago. he was actively in-
volved as a worker in the civil rights movement from 1964
to 1968. During this period he worked as a consultant in
the areas of urban development, juvenile and family prob-
lems, and social organization. Prior to this he worked
with the Joint Youth Development Committee of Chicago, where
he designed and developed a law enforcement program and
served as the committee's chief consultant to the Chicago
Police Department, community leaders, and juvenile court of-
ficials.

     The original BLK director for the PEBSI project, who
resigned on August 14, 1970, due to ill health, had a doc-
torate degree in sociology from American University. He
specialized in the field of education evaluation, particu-
larly education of the economically and culturally disadvan-
taged. Just prior to joining BLK in 1969, he served as
Chief of the Division of Program Experimentation at the De-
partment of Labor, and for a year prior to that he served
as Acting Director of the Research Development Branch of the
Bureau of Research in the HEW Office of Education.




                            29
     BLK's second director for the PEBSI project, who also
served as the director of the PEBSI field operations, was
employed by BLK in May 1970. She has a master's degree in
social welfare administration and, prior to joining BLK,
served as the Midwest Deputy Regional Director of the Com-
munity Relations Service, Department of Justice. She has
served also as an advisor to the Department of Housing and'
Urban Development on the Model Cities program; as the di-
rector of staff development for the Department of Public
Welfare in Hamilton County, Ohio; and as a social services
consultant to the Chicago Commission on Youth Welfare.

     The BLK Deputy Project Director for Research for the
PEBSI project has a doctorate degree in sociology and has
had experience as a consultant and researcher for the De-
partment of Housing and Urban Development Model Cities pro-
gram, and the Department of Labor's Study of Manpower Uti-
lization in the Tidewater Area of Virginia. He also served
on the Chicago Commission on Human Relations where he par-
ticipated in the interview and analysis phases of migration
studies of blacks and Puerto Ricans.

     The BLK Deputy Director for Operations has a master's
degree in social work, and has served as an associate di-
rector of the Model Cities program for the city of Chicago
and as the director of development and planning for youth
of the Chicago Commission on Youth Welfare.

CONCLUSION

     On the basis of this information, it appears to us
that the persons employed by the contractor generally pos-
sessed the education and experience necessary to perform
the type of work required by the contract.




                             30
APPENDIXES




  31
                                                                                             APPENDIX I


       WhIGHI       *I   Ad
                                                                                            CoMMlArrs
         STATE OP    X                                                            JMT GCOwM.CoYrm.'       ·"IWM&A
                                                                                  JINT COMInTTYI MI
                                                                                                 _ Fl"ea[ P@   gIrM

   ..^HS.OU                     .,
                               I..      Congrte of th)etniteb Stattes                         OrcTMU

                    ,,,,,,_
                         ~                     Roust of tprtesttntatib
                                               R'
P.O.   ox 'U. TEXuuARA.        CA
                         NM-                    =I   (u~binPom. C 20516
                                                       June 6, 1970



          Honorable Elmer B. Staats
          Comptroller General of the United States
          General Accounting Office
          441 G Street, N. W.
          Washington, D. C. 20548
          Dear General Staats:
                       Enclosed for your kind attention is my file with respect
          to the Programs Evaluation by Summer Interns (PEBSI) project funded
          by the Department of Health, Education and Welfare and under the
          supervision of Dr. James 6. Abert, Deputy Assistant Secretary for
          Evaluation and Monitoring. The project involves a contract in the
          amount of almost qo90,000 with BLK, Inc., a private firm based here
          In Washington.
                     As you will note in the attached correspondence, it is my
         contention and that of'a number of professionals in the field of education
         that the project represents an Indefensible waste of Federal funds. I
         also concur in the views of the National Education Association that the
         contract for the project was entered into without proper authority,
         without justifiable cause, and in violation of the Intent of Congress.
                      If you have not already done so, I respectfully request that
         you order a prompt and thorough examination of this project and contract.
         Your assistance in this regard will be deeply appreciated.
                                    With kindest regards and best wishes, I am

                                                                   Sincerely yours,




                                                          33
SCalUWlE     Or SURCE O FUNDS FOR THE PIRUOJT AD PR3G4HS EVALUATED DUING THE PUSI PRTOJiT


                                                       Amounts           Authority to               Proarems
                                                      provided           expend funds               vautad
                                                      for PIBSl            for evalua-             under PEBSI
           A8socY             Budset cateiory          proet             tion Durpoyes               Proiect
 Office of Education       Higher education           $ 82,650         20 U.S.C. 1222           Upward Bound

                                                                                                Student aid

       Do.                 Elementary and second-
                           ary education               110,175              do.                 Bilingual educa

                                                                                                Title I-cope
                                                                                                tory and sigr
                                                                                                education
       Do.                 Research and training       19 8 . 6 75 a        do.
 Office of Education       Libraries and comunmity                                              Adult basic edu
                           services                     27,550              do.                 cation
 Health Services and
  Mental Health Ad-        Comprehensive health
  ministration             planning and services          5,500        42 U.S.C. 246(e)         Rat control
       Do.                 Hental health                                           2
                                                       154,275         42 U.S.C.       688(p)   Comunity mntc
                                                                                                health centers
       Do.                 Haternal child health                                                Maternity and i
                           and welfare                 164,525         42 U.S.C. 713(b)         fant care
                                                                                                Children and
                                                                                                youth projects
                                                                                                Family planning

 Social and Rehabili-      Development of prograst                                              Foster Grand-
   tation Service          for the aging                55,100         42 U.S.C. 3031           parents

                                                                       42 U.S.C. 3031(d)        Title III,    ld
                                                                                                Americans Act
                                                                                                1965
       Do.                 Cooperative rescarch or                                              Social Services
                           demonstration projects       88,150         42 U.S.C. 1310           recipients of a
                                                                                                for dependent
                                                                                                dren
       Do.                 Grants for rehabilita-
                           tion services and facLl-                                             Vncational rehal
                           ities                        55,100         29 U.S.C. 37(e)          tation
 Office of Economic        Economig opporttLnity
  Opportunity              program                      50,000         42 U.S.C. 2826           Project Head Sto

                                                      $991 700
 aFunds for a11 educational programs.
 bProJect Head Start is administered by HEW but is funded by the Office of Economic Opportunity.
                                                                                      APPENDIX II


                                     Description of projrM
  Designed to develop skills and
                                  motivation necessary for success
  risk high school students, 90                                       in college in academic
                                 percent of whom must be from
                                                                low-income families.
  Grants to 2- and 4 -year colleges
  assignments, on and off campus,     and to nursing and vocational
                                                                     schools for work-study
                                    for students with financial need.
  Designed to meet the special
                                educational
  years who have limited English-speaking needs of children aged three to eighteen
  dominant language is not English.          ability and who come from families
                                                                                 where the
  Grants to school systems throughout
  centration of low-income families   the States, to be used in areas with
                                    to provide compensatory programs to    a high con-
  tionally deprived children up                                         bring educa-
                                to normal achievement   levels.


 Designed to provide basic curriculum
 ment levels in math, speaking,       to people over 16 years of age,
                                reading, or writing English           whose achieve-
                                                            are below the 8th grade.

 Provides direct grants to supplement
 tiate new ones.                      ongoing urban rat-control projects
                                                                         and to ini-

 Provides construction and seed
                                money for community and mental
 Provides prenatal and postpartum                              health centers,
                                  care to women to reduce maternal
                                                                   and infant mortal-
 ity and morbidity.

 Designed to provide screening,
 dental, to children of preschooldiagnosis, and preventive service,   both medical and
                                   and school age.
Prov!Jes assistance in areas
                               with high
low-income families to any low-income infant mortality rates and a concentration of
                                         woman wishing family planning
                                                                       help.
Men and women over 60, with
                             low incomes, who work 20 hours
deprived, and physically or mentally                          a week with
years of age.                          handicapped children from infancy neglected,
                                                                          through 16

Designed to help the elderly
                             maintain their independence
and to help them stay actively                           while living in a community
                               involved in community life.

 Provides a variety of social
                               services to present and potential
 dependent children and to adult                                  recipients of aid for
 services offered are determined relatives of dependent children. Eligibility and
                                  at State and local levels respectively.
Provides counseling, work experience
services designed to make employable and job training, and related rehabilitation
or a person who is disadvantaged       a person with physical or
                                   (sometimes interpreted to mean mental disabilities
                                                                   poor).
Open to preschool children,
                             90 percent of whom must come
help prepare them for school.                              from low-income families, to
                                 Each
involvement, and education componentsprogram must include health, nutrition, parent
and aides.                              and a career development program for
                                                                              teachers




     U.S. GAO, wob., D.C.
                                                  35