oversight

Interim Investigative Report - Improper Contracting and Procurement Practices Utilized to Circumvent the Competitive Bid Process

Published by the Office of Personnel Management, Office of Inspector General on 2013-04-02.

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

Honorable John Berry                                                                                              2


the amounts paid for Mr. Liff’s services were reasonable, we take the position that because
the Federal contracting procedures intended to safeguard taxpayer dollars were not
followed, these funds were spent wastefully.

Our investigation revealed that HRS employees repeatedly contacted a small business with
which OPM already had a contract, Information Experts, Inc., and requested that
Information Experts hire Mr. Liff for three specific projects: the consulting work for
DOL-VETS that was the subject of the DOL-OIG investigation; a training session for HRS
employees; and, organizational assessments for OPM’s Office of the Chief Financial
Officer, Retirement Services, and OPM’s internal Human Resources office. HRS made
clear to Information Experts that it would receive these awards if it subcontracted with Mr.
Liff for these projects.

We believe that there were two driving causes of this waste.

First, we found that Michael Grant, Counselor to the OPM Director, 3 and Kay Ely, former
Associate Director of HRS, 4 utilized their positions to give Mr. Liff preferential treatment.
While carrying out the expressed wish of Mr. Grant and Ms. Ely to utilize Mr. Liff as a
consultant,5 Frank Esquivel, former Deputy Associate Director of HRS, and
former Chief of HRS’s Vendor Management Branch (VMB), gave direction to lower level
staff that resulted in the favored treatment to Mr. Liff. The actions of all of these
individuals resulted in the circumvention of Federal contracting procedures by arranging
for Mr. Liff to be hired without competition.

Moreover, we found that in this instance Ms. Ely failed to fulfill her responsibilities as the
Associate Director of HRS. It was her duty to ensure that HRS complied with all Federal
contracting law and procedures. She had extensive experience in Federal contracting
work, including her former position as Deputy Associate Director of what is now OPM’s
Facilities, Security, and Contracting (FSC). She not only failed to stop the improper
practices through which Mr. Liff was placed with HRS contractors, but she took an active
role in ensuring that Mr. Liff received this work.


3
   At the time that these events took place, Mr. Grant’s title was Senior Advisor to the Director. Under both
titles, he was a member of the Senior Executive Service (SES). Mr. Grant has considerable Executive
Branch experience having held positions in the Carter, Clinton, and Obama Administrations. He previously
worked at OPM from 1993 to 1997 as Counselor to the Director and Deputy Chief of Staff.
4
   As the Associate Director of HRS, Ms. Ely was a career member of the SES. Prior to assuming this role,
she was the OPM Deputy Associate Director of Contracting, Facilities, and Administrative Services (now
Facilities, Security, and Contracting). Her past experience in Federal contracting includes holding the
positions of Associate Administrator for Acquisition Implementation in the Office of Management and
Budget’s Office of Federal Procurement Policy, and Director of the Acquisition Resources Service at the
U.S. Department of Veterans Affairs. She has held several other Government contracting positions in
addition to serving on the Board of Directors for the Federal Acquisition Institute and the Board of Advisors
for the National Contract Management Association.
5
   For the sake of simplicity, we use the term “hire” throughout this interim report. To clarify, however, this
does not connote an attempt or intent to employ Mr. Liff as a Federal civil servant, but rather to establish
some form of contractual relationship between Mr. Liff and the Federal Government (i.e., contract with Mr.
Liff directly or indirectly as a subcontractor for a prime contractor such as Information Experts).
Honorable John Berry                                                                                            3


Second, mismanagement within HRS created a situation where circumvention of the
competitive bid process was considered to be acceptable behavior. The evidence reviewed
suggests that the primary concerns with HRS were the speedy issuance of task orders 6 and
responsiveness to HRS’s customers. Economy, efficiency, and merit were not meaningful
factors in the award of these task orders because, as discussed below, the decision to use
Mr. Liff was made before OPM even solicited bids for the projects.

Meanwhile, FSC, charged with oversight of HRS contracting procedures, failed to execute
meaningful supervision, which may have prevented the inappropriate actions that occurred
in this situation.

Further, based upon information obtained from documents subpoenaed from Information
Experts, we are concerned that it may be a common practice at HRS to use small
businesses as a “pass-through” to hire a preferred vendor, thereby permitting that vendor to
avoid competition. This practice increases the likelihood that the Federal Government will
be charged an amount that is based upon contractors’ profit goals rather than the best value
available to the Government.

As a result of actions by Mr. Grant and Ms. Ely and the mismanagement within HRS
(including the lack of oversight by FSC), approximately $450,000 in taxpayer dollars was
paid to Information Experts so that OPM (as well as DOL-VETS) was guaranteed access
to Mr. Liff via a subcontract without competition.

While we identified misuse of position and mismanagement within OPM, we did not
identify any evidence that Director Berry engaged in any inappropriate conduct. During
our investigation, we learned that Director Berry established an initiative within the agency
that directed OPM department heads to proactively address poor performance. OPM
personnel later referenced the Director’s initiative when communicating about Mr. Liff,
which may have contributed to the pressure or time sensitivity perceived by certain
individuals.

In conclusion, our investigation has raised serious concerns about the stewardship of
taxpayer funds by HRS and FSC. In this instance, Federal contracting procedures designed
to promote economy, effectiveness, and efficiency were bypassed. This is consistent with
the findings of the DOL-OIG’s investigation.

This interim report summarizes the administrative findings of our investigation. We are
currently still investigating other aspects of this case.




6
  A “task order” is an award that is issued under an Indefinite Delivery, Indefinite Quality (IDIQ) contract,
which is competed in the same way as other Federal contracts. The IDIQs between HRS and vendors allow
the vendors to compete to perform future work for HRS’s clients. This work is performed under a task order.
Honorable John Berry                                                                                     4


                                        METHODOLOGY

Our investigators interviewed 27 individuals, consisting of current and former OPM
employees (including Director Berry) and contractors. We also reviewed several thousand
emails from multiple OPM email accounts as well as subpoenaed documents and emails
from Information Experts. Additionally, we obtained and examined OPM files related to
the contracts and task orders at issue.

The comparison of interviews and documents revealed some significant inconsistencies. It
appeared certain individuals we interviewed were not entirely forthcoming, and so we
followed up as necessary to obtain more complete information.


                                          BACKGROUND

DOL-OIG Report

The DOL-OIG investigated an allegation that Mr. Jefferson and DOL-VETS Deputy
Assistant Secretary John McWilliam abused their authority by coercing DOL employees
into manipulating existing Federal contracts in order to hire Mr. Liff without the benefit of
competition.

During its investigation, the DOL-OIG learned that Mr. Liff became acquainted with Mr.
Jefferson after the 2008 Presidential election. Mr. Jefferson was on the Veterans Benefits
Administration (VBA) Transition Team for the Obama-Biden Administration. During Mr.
Jefferson’s service on the Transition Team, Mr. Liff sent him a 120-page document he had
written presenting ideas to improve VBA.

The DOL-OIG found that DOL-VETS employees were instructed to contact certain
vendors with which DOL-VETS already had a contract and request that the vendors hire
Mr. Liff as a subcontractor for a particular project.

These vendors participated in a program administered by the Small Business
Administration (SBA) that permits agencies to use expedited procurement procedures
when awarding a contract to small and disadvantaged businesses. These are referred to as
“8(a)” firms or companies.

There are situations where 8(a) status may be abused, such as an inappropriate “pass-
through.” This is an arrangement whereby an 8(a) firm is awarded a contract, but then
enters into a subcontract with another company that is unable to qualify as an 8(a) firm to
perform a majority of the actual work. Such an arrangement is prohibited by SBA
regulations and the Federal Acquisition Regulation (FAR). 7 Such pass-throughs



7
  13 C.F.R. § 125.6 (“Prime contractor performance requirements (limitations on subcontracting)”); FAR
Subpart 52.219-14 (“Limitations on Subcontracting”).
Honorable John Berry                                                                                          5


circumvent the normal competitive procedures that would be required if the subcontractor
were to compete for the contract against other vendors offering the same services. 8

The DOL-OIG found that DOL-VETS utilized three different 8(a) firms as pass-throughs
in order to take advantage of the expedited 8(a) procurement processes while still ensuring
it could employ Mr. Liff. When the first firm’s contract ended, Mr. Liff was shifted to
another 8(a) company. When the contract with the second company likewise ended, DOL-
VETS then entered into an interagency agreement with OPM’s HRS after one of its 8(a)
vendors agreed to hire Mr. Liff. 9

The DOL-OIG ultimately concluded that Mr. Jefferson and others placed DOL-VETS
employees in “untenable positions” and DOL-VETS contractors in “precarious positions”
in order to obtain Mr. Liff’s services without going through the competitive process.

The DOL-OIG substantiated the allegation that Mr. Jefferson abused his authority with
respect to the retention of Mr. Liff. The report noted that Mr. Liff was not known to any of
the contractors prior to the request by Mr. Jefferson to hire him. Although the contracts for
Mr. Liff were approved by DOL procurement officials, the procurement of Mr. Liff’s
services should have been executed through open competition, or through an appropriate
sole source procurement. Instead, Mr. Jefferson’s actions caused DOL-VETS personnel to
circumvent the usual and proper procurement rules and regulations. While Mr. Jefferson
told the DOL-OIG that he instructed his staff to follow all legal and ethical standards with
respect to Mr. Liff’s retention, the statements provided to DOL-OIG by DOL staff
members and others indicated that they often felt intimidated and pressured to circumvent
these standards in order to meet Mr. Jefferson’s stated objectives of obtaining and retaining
the services of Mr. Liff.


OPM’s Human Resources Solutions

The OPM component at the center of our investigation is HRS. HRS provides various
human resources management services on a reimbursable basis to approximately 150
Federal agencies and entities and annually obligates on their behalf between $600 million
and $800 million of Federal funds.

HRS services its customers using both internal OPM staff and outside contractors.
Through its Vendor Management Branch (VMB, previously named Training and
Management Assistance or TMA), HRS enters into Indefinite Delivery, Indefinite Quality
(IDIQ) contracts with multiple vendors under which vendors may compete to perform
future work for HRS’s clients. This work is performed under a “task order” that is issued

8
  Agencies may inappropriately seek pass-throughs when the agency cannot justify entering into a sole
source contract with the preferred vendor. Use of a sole source contract generally requires that a vendor’s
products or services be sufficiently unique that no other vendor is expected to be able to offer comparable
products or services.
9
  Mr. Liff’s firm, Stewart Liff & Associates was not an 8(a) vendor during the time period at issue. We are
not aware of whether it currently holds that status.
Honorable John Berry                                                                                               6


against the vendor’s original contract with VMB. When a client approaches HRS with a
request for services, VMB sends these vendors a statement of objectives 10 and requests that
they submit proposals for the work. After the proposals are evaluated, a vendor is chosen
to perform the work called for by the task order. As under standard contracting processes,
there is an expedited process for 8(a) firms holding IDIQ contracts to compete for certain
task orders.

It should be noted that a vendor is permitted to utilize a subcontractor to perform a task
order. During interviews with our investigators, OPM employees have repeatedly
emphasized that OPM has no contractual relationship with such subcontractors, but only
with the prime contractor on VMB’s pre-competed list. As will be discussed in this
interim report, in this situation, OPM officials had a great deal of contact with the
subcontractor, Mr. Liff, on a number of contractual matters, including the payment of
invoices.


                                     TASK ORDERS AT ISSUE

Our investigation focused upon three task orders awarded to Information Experts, Inc.,
under its contract with HRS and on which Mr. Liff performed work as a subcontractor. In
all three instances, HRS employees arranged for Information Experts to hire Mr. Liff prior
to issuing the solicitation package 11 (which was sent only to Information Experts), thus
ensuring that DOL-VETS and/or OPM would have access to Mr. Liff for the projects.

1. DOL-VETS: In September 2010, DOL-VETS began to work with OPM’s HRS to
   obtain various consulting services related to performance management and the redesign
   of physical work space in order to improve employee performance and morale (“visual
   management”). The solicitation package requesting proposals for this task order was
   issued on September 8, 2010.12 The amount of the award was $110,519.

2. HRS Training: After sending Information Experts a solicitation package on September
   22, 2010, 13 HRS hired the company for a one-day training session for HRS leadership
   on the importance of performance management for Federal employees. This session
   was held on November 2, 2010, in Kansas City, Missouri. Mr. Liff conducted the
   training as a subcontractor for Information Experts, which was paid $7,470 for this task
   order.


10
    The statement of objectives contains a description of the project to be performed and the requirements that
the vendors’ proposals must address. It is sometimes referred to as a “statement of work.”
11
   We use the term “solicitation package” to refer to the email that transmits the statement of objectives and
the official invitation to submit a proposal in response to that statement of objectives. A solicitation package
is also sometimes referred to as a “request for proposals.”
12
    Email from VMBTOC@opm.gov to opmvmbtoc@informationexperts.com, “Solicitation – DOL VETS
Consulting Services. OPM Small Business Set Aside Program”, Sept. 8, 2010, 11:30am (hereafter, “DOL-
VETS Task Order Solicitation Email”).
13
    Email from            to Levin, “Solicitation – OPM Improving Performance of Government Employees”,
Sept. 22, 2010, 3:47pm (hereinafter, “HRS Training Task Order Solicitation Email”).
Honorable John Berry                                                                                           7


3. Organizational Assessment: In response to a February 8, 2011, request for proposals, 14
   OPM awarded Information Experts a task order for an organizational assessment (and
   associated consulting services) of specific program areas at OPM. Originally the focus
   of this project was on the Office of the Chief Financial Officer (OCFO), but it was
   subsequently expanded to include Retirement Services and OPM’s internal Human
   Resources office. Mr. Liff worked on-site at OPM over the course of approximately
   six months and was the primary author of three reports that discussed his evaluation of
   these program offices. The task order was for $331,248.


     ISSUE #1: MISUSE OF POSITION BY MICHAEL GRANT AND KAY ELY

Stewart Liff’s Introduction to OPM

Mr. Grant met Mr. Jefferson in 2000, when Mr. Jefferson was a White House Fellow. 15
They appeared to have maintained their acquaintance during the ensuing years. 16

In May 2009, Mr. Jefferson first brought Mr. Liff to Mr. Grant’s attention. 17 Within a
month, and continuing through 2011, Mr. Grant began to circulate Mr. Liff’s name and
background information to other senior OPM officials, usually accompanied by a
suggestion that these OPM officials contact and/or meet with Mr. Liff. These officials
included Ms. Ely18 and her deputy Mr. Esquivel, 19 as well as Angela Bailey, at that time
Deputy Associate Director of Employee Services; 20 Stephen Agostini, former Chief



14
    Email from          to ‘Information Experts’ [exact email address unknown]; cc           “Solicitation –
OPM Consulting and Assessment Services – Request for a Task Order Proposal”, Feb. 8, 2011, 11:53am
(hereinafter, “Organizational Assessment Task Order Solicitation Email”).
15
   Grant Interview #1.
16
   Email from Grant to Jefferson; cc Grant; “RE: Coffee this evening around 6pm – Yes!”, May 27, 2009,
10:29am; Email from Grant to Jefferson, “RE: Inviting you to my Senate Confirmation Hearing on Wed 22
July at 10am”, July 16, 2009, 1:32pm; Email from Jefferson to Grant; cc           ; “RE: How about Tuesday
night for dinner”, April 26, 2010, 7:50pm; Email from Grant to Jefferson, “RE: Free for a Mastermind dinner
/ get-together tomorrow?”, Oct. 14, 2010, 6:09am.
17
   Email from Jefferson to Grant, “Background info on Stewart Liff”, May 29, 2009, 11:28am; Email from
Jefferson to Grant; cc Liff; “Introducing you to Stewart Liff”, May 31, 2009, 9:29am.
18
   Email from Ely to Grant, “POC”, June 30, 2010, 2:15pm (Ms. Ely requested Mr. Liff’s contact information
based upon her discussion the day before with Mr. Grant); Email from Grant to Ely, “Contact info,” June 30,
2010, 6:52pm (immediately before sending this email, Mr. Grant wrote to Mr. Liff, “I am going to have Kay
Ely contact you. She heads our Human Resources Services [sic] revolving fund division that has the
approved contractor cadre I was telling you about.” Email from Grant to Liff, “RE: RE: Breakfast”, June 30,
2010, 6:51pm); Email from Grant to Ely, “Did You”, July 14, 2010, 10:02am; Email from Ely to Esquivel,
“Fw: Per the previous email”, July 14, 2010, 11:00pm (informing Mr. Esquivel that “Michael thinks we
should talk to him [Mr. Liff]”); Email from Grant to Ely, “RE: OPM Introduction”, Aug. 23, 2010, 5:19pm.
19
   Email from Esquivel to Grant, “Re: Are There”, Mar. 12, 2010, 7:33pm (Mr. Esquivel informed Mr. Grant
that he was “[w]orking the other items we discussed yesterday”, one of which was “checking on role for
consultants like Liff”); Email from Ely to Esquivel, “Fw: Per the previous email”, July 14, 2010, 11:00pm.
See also, discussion below regarding the March 2010 project for the U.S. Department of Veterans Affairs.
20
   Email from Grant to Bailey, “RE: How a good federal manager hires and fires”, Jan. 1, 2010, 7:17pm;
Email from Grant to Bailey, “RE: A conversation”, Feb. 11, 2010, 3:49pm.
Honorable John Berry                                                                                                  8


Financial Officer (CFO);21Daniel Marella , Depu~ CFO ;22 Justin Johnson, Dep uty Chief
of Sta ff;23 Jennife r Ma son, Deputy Chief of Staff; 4 and Elizabeth Montoya , Chief of
Sta ff.25 Mr. Grant also provided a copy of Mr. Liff' s book to Director Berry." In
addition , Mr. Grant recommended Mr. Liff to a fonn er OPM Deputy Director, John
Sepulveda, who at the time wa s the Assistant Secretarr for Human Resources and
Adm inistration, U.S. Department of Veterans Affairs . 7

Based upon interviews and the review of ema il exchanges,:Mr. Grant spoke of Mr. Liff
most often to Ms. Ely and Mr. Esquivel, the two individual s who headed HRS. He
suggested multiple times that Ms. Ely and/o r Mr. Esquivel not only meet with:Mr . Liff, but
also consider whether there was a role for him on various HR S projects. Mr. Grant
prom oted the idea that HR S could ma rket Mr. Liff' s services - a concept that Ms. Ely also
came to embrace ." After meeting Mr. Liff for the first time, Ms. Ely wrote that she
needed "to figure out how to get more ' Liff" while he is working" on his application to be
on the Genera l Services Administration (GSA) Schedule, and she thanked Mr. Gra nt for
recommending him to her. 29 In an email to Ms. Montoya in the fall of 20 10 suggesting
that OPM hire Mr. Liff' for internal work, Mr. Gra nt wro te that " [w]ith much persistence, I
finally got Kay [Ely] to spend some time with him , as I think he can be a valuable
'product ' for her. She is now in love with him & has begun to utilize him in multiple ways
going fOlw ard .,,30

In March 20 10, Mr. Esquivel emailed HRS staff me mbers responsible for a $2 billion
project with the U.S. Department of Veterans Affairs (VA) Human Capital Investment
Plan (HCIP) and infonn ed them that Mr. Grant wanted:Mr. Liff "to serve as an advisor" on
the project." After an exec utive meeting between:Mr. Grant and Mr. Esquivel on March
23,2010, the HR S team working on the project included a section in the daily meeting


11  Email fromGranttoAgostini ..Triple Che cking ", Dec . 16.2010. 2:5 1pm ("I am moving forward On [sic]
the two ' folks' we ha ve talked abo ut to help on performance management and emp loyee eng agement. I am
trip le checking with you as the 'buyer ' . I know we have discussed this and you already said yes twice after I
rough priced it ont o I'm at the level w ith it now where very soo n there will be no turni ng back. . .thus the
trip le check.").
11 Email from Ma rella to Grant, "Last week 's Discu ssion", Dec . 22,2010 , 1O:37am (t'You asked me to
remind yo u 2 of the items we discussed last week . ..[TIle seco nd o ne wa s] Po ssibly use Stuart Liff (spelling)
as contractor support (issue was statement ofwo rk and po ssible sole sourc e opt ion)"): Marella Interview.
13 Email from Grant to Johnson: cc Grant "Interesting Guy" , June 14, 2009, 4 :45pm: Email from Grant to
Grant cc Johnson and Mason: "Today ", Dec . 9, 2010. 9:30am ; Jo hnson Interview. See also, Email from
Grant to Grant , June 12. 2009, 6:19am (remind ing himselfto send Mr. Liff's website to Mr. Johnson).
14 Email from Grant to Grant; cc Johnson and Mas on; "Today", Dec . 9. 2010. 9:30am : Email from Grant to
Maso n. "RE: OPM HRS VA HCIP Daily Statu s report for 25 Ma r", Mar. 26. 2010 , 7:59am.
15 Email from Grant to Mo ntoya . "S tuart Liff", Oct. 15, 20 10, 7:44am
16 Berry Interview.
17 Email from Grant to Sepulved a. "S omeone you might Find", Aug. 19, 2009, 8:34am
18 Email from Ely to Grant. "RE : OPM Introduction ", Aug. 23 . 2010 . 5:23pm
19 Email from Ely to Grant. "RE : OPM Introduction", July 28.2010 , 4 :38pm
30 Email from Grant to Mo ntoya . "S tuart Liff", Oct. 15, 20 10, 7:44am See also. email chain contained
within Email from Grant to Liff, "RE : Nice to see you", Oct. 6, 2010 , 3:23pm (after in fo rmin g Mr. Liff ofthe
meeting scheduled for him w ith M s. Montoya. Mr. Grant informed Mr. Liff that he had "p ersistently initiated
you meeting" Ms. Ely).
31 Email from Esquivel to _            "FW : Daily Status Report 04-05-10", AprilS, 20 10, 10: 11pm.
Honorable Jo hn Berry                                                                                                  9


notes entitle d " What will be the ro le of Stewa rt Liff with the VA HCIP project?,,32
According to these daily reports,                    the Chief of HRS 's VMB, and other HRS
employees recei ved guidance from I\1r. Gra nt to coordinate with Mr. Liff to (1) de termine
what exactly I\1r. Liff could do on the project, (2) draft a statement of work for his serv ices,
(3) calculate how much those servi ces would cost, and (4) work with the OPM contracting
office rs to find a means to hire him as a contrac tor.r'

The suggestion of uti lizing an 8(a) pass-through wa s first raised during a long ema il
discussion of Mr. Liff' s possible role in the VA-HC IP project. _             wro te:

         I co uld bring him on thro ugh an Sfa) vendor we alrea dy have so the costs
         would be a little more then [sic] wha t he costs. Th e only rea son we would
         have to do thi s is due to the short him around time to get him in the door. If
         we had to do all the other pap er work we would not be able to get them on
         board pr ior to the end of May.34

This ema il demonstra tes that HRS officials, including Mr. Esquivel" and .
_        knew that it would be more expensive to hire I\1r. Liff usin g an Bfa) pass­
~, but cons idered payin g the added expense in orde r to quickly gain
gua ranteed access to I\1r. Liff Moreo ver, it should be noted that no one , includi ng
J\1r. Esquivel, replied to thi s email with an expression of surp rise at the idea or with
a question regarding its propri ety.

Ultimately, Mr. Liff wa s not hired for the VA-HC IP project. After reviewing the
VA-HC IP project' s budget, HRS staff de term ined that the budge t co uld not support
hiring him ." I\1r. Gra nt then instructed them to cea se pursuing the idea."

In late Ju ly 20 10, Mr. Esquivel ema iled _ an OPM intemal contractor who
handled marketing issues for HRS, tellil~ (Mr. Esquivel) and M s. Ely "spent

31 OPM HRS D aily Status Rep ort fo r VA HCIP dated March 23. 20 10, contained in Email from Esquivel to

Grant cc _           Ely. and Roman ; "HRS Dail y status report for VA HC IP 23 Mar 2010 " , Mar. 23. 2010 .

1:46pm. ~ OPM HRS Daily Status Reports/or VA HCIP dated March 24. 25, 26, 29 (mislabeled as

26), and 31, and April 1. 2. 5, 6. 7, 8 (mislabeled as 7), 9, and 12. 20 10.

J3 See, OPM HRS Dailv Status Report/ or VA HCIP dated Ma rch 26, 20 10. contained ill Email from Roman

to Grant cc Mason. _           Esquivel and Ely; " OPM VA HCIP Status Repo rt Mar 29. 2010", Mar. 29.

20 10. 9:56 pm: OPM HR S D aily Status R ep ort for VA HCIP dated March 3 1, 20 10, contained in Email from

Roman to Grant; cc Ely. Esquivel _ and Mason; "OPM VA HCIP Status Report Mar 3 1, 20 10", Mar.

31, 20 10, 11:18pm: Email from E~ _ "FW: Daily Status Report 04-05-10", April 5, 20 10,

lO:11pm.

34 Email from _ t o _ _ and _                                cc: _      "RE: Stewart Liff', April 06 . 20 10, 11:36

am. TIlls ema iT"cl:':' wa~a~:Mr. E~Ema~_ to Esquivel. "FW: Stewa rt Liff ',

April 6, 2010. 12:09pm.

35 Email from Esquivel to _            "RE : Stewart Liff ", April 6. 20 10, 12:19pm (vvou have an swered my

que stion s in that we can't ~ll as part ofHCIP and if we found alterna tive sources of funding he could

be brought on via an 8a co ntract.").

36 Email from Esquivel to Grant cc Ely, MaSOIL and _                "RE: HRS Daily Status Report 4-6-10 (VA

HCIP)". April 6. 2010 , 5:40pm

37 Email from Grant to Ely, Esqui vel _ _ MaSOIl, and Mo ntoya : cc Grant "VA Wed Agenda",

April 13, 2010. 5:56pm.

Honorable John Berry                                                                                                    10


an hour talking to [J\1r. LiffJ at the request of Mi chael Grant", and requested that _
"discuss with him how he might sub [contract] with one of the V1\.ffi prime s on projects."
During int erviews with our investigators, Ms. Ely and Mr. Esquivel stated that it was not
unusual for individual s to come to them to inqu ire about working for HRS. 39 The
di fference in Mr. Liff' s case, as the email record makes clea r, is that he wa s not j ust any
vendor, but rather a specific person in whom both I\1r. Grant and the senior HRS leadership
were interested, and who consequently received preferenti al treatment.

By Augu st 24, 20 10, Mr. Liff inform ed Ms. Ely that he had "hooked up with SRA
International," which is a VMB prime contrac tor." SRA Intern ational, Inc., is a large finn
and thus does not qualify for the expedited treatment afforded to 8(a) firms . Despite the
contractual relati onship estab lished with .Mr. Liff, SRA Inreru ational was never given the
opportun ity to compete for the task orders discussed in this interim report . Instead , HR S
arranged for an Sfa) finn , Information Experts, to hire .Mr. Liff as a subcontractor. Thi s
provided swift and direct acce ss to .Mr. Liff, beca use HR S could award task orders to the
8(a) fin n without competition .


DOL-VETS Task Order

On Tuesday, August 3 1, 20 10, An~li , the DOL-VETS Chief of Staff and Senior
Advisor to .Mr. Jefferson, ema iled _             be cause DOL-VETS wa s "looking to procure
the serv ices of a consulta nt" for a certain proj ect. 4 1 He empha sized that this wa s a high
prior ity for .Mr. Jefferson and that the y were working with a short time line .

After _          forwarded the email to individuals within HRS,                                       at that time
a supervisor in VMB, provided .Mr. Magdieli with the followin g re sponse:

         Given the comm itment we have at OPM to he~eterans , we wo uld
         like to support the requirement you 've sent to _              However , there
         are some real constraints I need to convey to you. First, we cann ot provide a
         direc t access to I\1r. Liff. He does app ear to have a relationship with one of
         our prime contractors, but we would have to either compe te this work
         among all our prime contractors or possibly assign it to an Sa fin n or some
         other small business that we may be able to award to directly. That would
         dec rea se the likelihood of reaching Mr. Liff significantly.

         Moreover, we have essentially filled our calenda r with task order
         compe titions and so find ours elves turning away customers trying to expe nd

38 Email from Esquivel to _          and Sm.ith-Heimbrock: cc .       and _         "S tewa rt Liff .. .r. dated July
30. 2010, 5:56pm.

39 Ely Interview #2; Esquivel Interview #2.

40 Email from Liffto Ely. "Re: Followup", Aug. 24,2010, 9:45a m. See also. Email from Esquivel to Grant.

"Interesting meeting wit h Stewa rt Liff..", Sept. l. 2010. 9:05pm (Mr. Liff "confirmed he is subbing thm

SRA.") .

41 Email from Magdieli to _ "Requesting Consulting Services for DOL VETS", Aug. 31, 2010.

9:55a m.

Honorable John Berry                                                                                               11


         FY l Ofunds.

         Are you OK with entering into an interagency agreement even if we are
         not able to access Mr. Liff? If you are , we will ask I. i~ ca n
         rework your stateme nt of requirements into a forma l Stateme nt of
         Obj ectives and 2. if Contracting will support a request to go the route of an
         Ba or small bu siness award . We're working again st a deadline of Friday for
         a completed agreement (signed on both ends) with a Stateme nt of
         Obj ectives. (emphas is in originalj"

Upon receiving                   email, :Mr. Ma gdie li forwarded the email chain to
J\.1r. Grant, asking whether there was "some creative , legal and ethical solution" to
the obstacles related to DOL-VETS obtaining J\.1r. Liff' s services."

That same day, an email from Mr. Esquivel shows that Ms. Ely requested that Dean
Hunter, Deputy Director for Facilitie s, Security, and Contrac ting (FSC), and _
_          Director of Contrac ting, FSC, provide HR S with suggestions about the
"contracting flexibilities" available to HRS with regard to .Mr. Liff. 44 .Mr. Hun ter
interpreted this email as meaning .Mr. Esquivel and Ms. Ely "are looking at what we could
do (eg, [sic] sole sour ce) to get this company [.Mr. Liff andlor Stewa rt Liff & As soc iates]
in place asap.?" Ms. Ely subsequently infonned.Mr. Hun ter and                      that
Stewa rt Liff & Assoc iates was not an 8(a) finn and that he was curre ntly not on the GSA
Schedule.46

Over the next two days, Ms. Ely, :Mr. Esqui vel, and _               exchanged a flurry of
emails discussing how OPM could provide DOL-VET S with access to .Mr. Liff. 47 Indeed,
J\.1r. Esquivel described their goal as "gettin g Mr. Liff to continue wo rking his Dept [sic] of
Labor effort s, but this time thru OPM" .48

It appea rs there was a sense of urgen~he request as on Septembe r 2, 20 10, :Mr.
Esquivel upda ted Ms. Ely on his and _           progress49 and she respond ed, "Okay ­
we ll you know Michael - he wants an imm ediate response ... And of course wouldn 't you



41  Email from _           to Magdie li; cc _       and _        "FW: Requesting Consulting Servi ces for DO L
VETS". Aug 3 1, 2010, 1:09pm (emp hasis ill origina~
43 Email from Magdie li to Grant, "Michael , Can yo u please assist - F\V: Requesting Consulting Servi ces for
DOL VETS". Aug. 3 1, 2010. 2:38pm
44 Email from Esquivel to _              and Hunter; cc McGuire, Ely. and _         : "Tomorrow's mtg with
 Stewart Liff. ..", Aug. 3 1. 2010. 4:40pm.
45 Email from Hunter to _              and _        cc _          "RE : Tomorrow's nag w ith Stewart Liff. ..",
Aug. 3 1, 20 10, 4 :59pm
46 Email from Ely to Hunter, Esqui vel and _              "Re: To morrow's nag w ith Stewart Liff.. .", Aug. 31,
2010. 1O:44p m.
47 See, e.g., Emai ls One and Thr ee in Appendix; Ema il from Esqui vel to Grant, "Interesting meetin g with
 Stewart Liff", Sept. 1,2010, 9:05pm ("What I was unsuccessful in doing today was getting with .          and
•                                 o work out the Dept of Labo r [sic] issue.") .
     to det ennin e int erim st. t.
    Email from Esquivel to             cc Ely; "Re: Mr. Liff", Sept. 2, 2010, 3:54pm.
49 Email from Esquivel to E , "RE: Voicema il", Sept. 2, 2010, 12:58pm
Honorable John Berry                                                                                           12


know, this is Liff stuff toO.,,50 Moreove r, Ms. Ely informed Mr. Gra nt that she wa s
per sonally impressing upon her staff that the DOL-VETS Task Order was a high pri ority.
In her email to Mr. Grant, she wrote , " So how do I keep the fires lit ifI am not here or
per sonally involved ? I need everyo ne in my organization to have that same sense of
urgency. Good example is this issue with DOL. I know the only reason the progress has
bee n made is because I jumped on it which is okay - I like operations't."

Earlier that same day, Mr. Grant emailed Mr. Magdieli to updat e him that they were "[s]till
working" on resolving the ma tter.52

After consulting with                in FSC , HRS leadership , including Ms. Ely ,
detennined that a sole source contract directly with J\.1r. Liff was not a procurement
strategy that they wanted to use.53 TIle fact that he wa s not an 8(a) firm wa s a factor
contributing to that decisiou." Despite Mr. Liff' s relation ship with HR S vendor SRA
International, Ms. Ely, :Mr. EsquiveL_                and their staff concluded it would be
faster, and thus preferable, for HRS to hire J\.1r. Lifftluough an8(a) firm that alrea dy had a
contract with HRS, which wo uld have the added benefit of providing OPM with credit for
using an 8(a) firuI.55

Em ails reflect that nearly a week prior to HR S issuing the solicitation package for this task
order, _           called Information Expe rts and emailed Mr. Liff' s contact information to
Ada m Levi n, Exec utive Vice President of Information Experts. Mr. Levin assured .
_      that Informati on Expe rt s would execute a teami ng agreement with J\.1r. Liff, and
~TIled the next day that it was done.56 Thi s is consistent with the DOL-QIG ' s finding
that contrac tors were not awa re of Mr. Liff' until agencies specifically requ ested him.

Internal emails subpoenaed from Information Experts described the arrangement as a
" favor" it did for OPM. 57 One employee wro te:

        Basically he [Mr. LiffJ has bee n doi ng the work [for DOL-VETS] and we
        were asked by OPM to team with him . It wa s set aside for him but he had
        no OPM schedule and the y wanted it on that vehicle. He plans on doing all
        the work with little to no input from us but I think we need to qc [perform a
        qua lity contro l review ofJ any de liverable s.58


50 Email from Ely to Esquivel. "RE : Voicema il", Sept. 2, 2010, 1:02pm

51 Email from Ely to Grant. "Qu estio n ofthe day", Sept. 2, 2010 , 3:57pm

51 Email from Grant to Magdie h, "RE : Michael - Can you please ass ist - FW : Requesting Consulting:

Services for DOL VETS", Sept. 2. 2010. 7:17am

53 Email Three in Appendix. See also, Email from Esqui vel to G rant, "Interesting meeting with Stewart

Liff.. ", Sept. 1,2010, 9:05pm ("Kay [Ely] is wo rking thru CG [Contracting Group] to determine w hether we

can sole so urce with him because of his unique per f mgmt and space integratio n expertise.").

54 Email Three in Appendix.

55 Id .

56 Email Two in Appendix.

57 Email from _            to Levin, "RE : Call from Special Agellt _        wi Dept. of Labor", Mar. 29.

2011 , 3:02pm.

58 Email from .        to _        "RE: DOL VETS Pricing.xlsx", Sept. 22. 2010, 6:52am

Honorable Jo hn Berry                                                                                             13


J\1r. Liff viewed the arra ngement as one of simple conve nie nce. He adv ised Information
Experts that he did not expect its employees to have any significant involve me nt: " I see IE
a s primarily being a pa ss thro ugh on thi s othe r than perhaps occasio na lly co nferring on the
de live rables. ,,59

Once M s. Ely wa s infonned that the 8(a ) arrange me nt wa s in place , she consulted with .
_        and mad e the final decision to hire .Mr. Liff through Informati on Expert s. 60
Thus, aPM had alrea dy chosen and effective ly awarde d the task order to Information
Experts before the solicitation package for the task order wa s issued on September 8,
2010.61

Emails One through Four in the Appendix attac he d to this interim rep ort are the primary
OPM and Informati on Experts emails arranging and discu ssing this agreement.


HRS Training Task Order

Shortly after the DOL-VETS task order began to be pro ce ssed through HRS, M s. Ely
dec ided that she wa nted Mr. Liff to speak at HR S 's lea dership training co nfere nce in
Ka nsas Ci ty. Ms . Ely told om investigators tha t she specifica lly chose Mr. Liff for this
training sess ion becau se she believed it wa s appropriate since he wa s already assoc ia ted
with an 8(a ) firm." Consequent ly, it wa s ope nly ackn owledged from the very beginning
that Mr . Liff wou ld not be required to compete for thi s work. 63

Through om email review, we foun d tha t Mr. Liff him self wrote the basic proposal that
wa s quoted verbatim in the statement of obj ectives and that senior HR S lea dership wa s
aware of thi s fac t. 64 While thi s may tec hnica lly be pe rm issible in som e situations under
co ntrac ting regul ati ons, OPM employees told our investigators that thi s practice is eithe r
not pennissible at all or that the practi ce is disfav ored.




59 Email from Liffto "         "Re: Copy of Cost Estimator Worksheet DOL VETS 9- 1D-1O.xlsx", Sept. 13,
2010 , 12:28pm.

60 Email Three in Appendix.

6! DOL-VETS Task Order Solicitation Email.

61 Ely Interview #2.
63 Email from _ t o                 "FW":Stewa rt Lift".Sept .21.201O.7:23pm("'This is one that will go to IE
for OPM"); E n~m                               "RE: Stewart Lift" , Sept. 23, 2010 . 1O:2Opm.
64 Mr. Liff sent a proposa to                  an HRS employee invok ed in planning the training event.
Email from Liff to _. "Re: POSS! e One Day Presentation to HR Solutions~a nk ' s
Organization) SES group and Man agers . No v 2, 2010.". Sept. 13.2010, 6:15pm. _                   forwarded
Mr. Liffs email and atta ched proposal to Mr. Esquivel. _ _ and other s, wntmg "Attached is
proposal [sic] from Stewart Liff. It looks fine to me . P~. If you approve, we will mo ve forward
on procurement." Email from _             to Esquivel : cc "    _          and _         "FW: Po ssible One Day
Presentation to the HR Solutions SES group and Managers. No v 2.2010." : Sept. 14. 2010, 9:37am. Thus, all
senior participant s were clearly aware that there would be no competition whatsoever and that Mr. Liff
through Informa tion Experts. was effect ively chos en for the project before the solicitation package even was
issued on September 22, 20 10. See, HRS Training Task Order Solicitation Email.
Honorable John Berry                                                                                                 14


Before the solicitation was issued,                     a senior V1\ffi project manager, either
at                direction or with his knowledge , emailed Informati on Experts to ensure
that they would hire J\.1r. Liff in exchange for be ing awarded the task order. 66 During this
email exchange, _                 told Information Experts that this training session "has our
Director' s attention." We found no other reference, in either interviews or documents,
suggestin g that Director Berry had a particular interest in this training session or
knowledge of Mr. Liffthis early in 2010.

Information Experts wa s well awa re of the preferential treatment given to .Mr. Liff within
OPM. An Information Expert s employee expre ssed concern about doing a second proj ect
with Mr. Liff when the company had not yet seen his work product from the first project' "
Despite this, the company accepted the task order awa rd anyway because, in the words of
the Informati on Expe rt s employee, it wa s clear that OPM "must love him't."


Organizational Asse ssment Task Order

In the fall of201O , senior OPM staff began di scussing the possibility of performing an
organization assessment within OPM. Mr. Grant informed our investigators that the
organizationa l assessme nt wa s his idea." Director Berry agreed with the concept, and it
wa s dec ided that the OCFO wo uld be the first assessed beca use Mr. Agostini, then CFO ,
wa s conce rued about possible dysfuncti on within his departm ent. 71

1.1r. Grant stated that it was his idea to utilize J\.1r. Lifffor this organizational
assessment. 72 On December 9, 2010, J\.1r. Grant coo rdinated a conference call with 1.-1r.
Liff and the Deputy Chiefs of Staff, J\.1r. John son, and Ms. Ma son. " He sent an agenda to
1.1r. John son and Ms. Ma son, listing topics to discuss with Mr. Liff, including a pil ot
program with the OCFO as we ll as other services J\.1r. Liff might be able to provide OPM,
such as an OPM agency-wi de assessment and support for OPM 's performance
managem ent wo rkgroup. "




65 Emai l c hain co nta ined in Email ~ to _ ·.RE : Stewart Liff", Sept. 22. 2010 . 8:55am One
email in the c hain, from _         to ~W: Stewart Lift" . Sept. 2 1, 2010 , 7:23pln stated ·'TIlis is one
that will go to IE for OPM . Can you request a proposal for this so we can get this co mp leted. [sic[" See also .
. . Interview #2.
   Email Five in Appendix. The solicitatio n package was sent directly - and only - to Mr. Levin by •
. . a few hours after her ema il inquiring: abo ur Mr. Liff. HRS Training: Task Order Solicitatio n Entail.
   Id .
68 Email from .          to Levin, "RE: Solicitatio n - OPM Improving Performance of Go vernment
Employees". Sept. 22, 2010 , 4:10pm
69 Id .

70 Grant Interview # 1.
71 Agost ini Interview .
71 Grant Interview #2.
73 Entail from Grant to Grant; cc Johnson and Ma son; "Today", Dec . 9. 20 10. 9:30am.
74 Id .
Honorable Jo hn Berry                                                                                                 15


The ev ide nce suggests that J\1r. Gra nt alrea d;r had this project orga nize d and wa s sim ply
waiting for 1\.1r. Agostini to agree to fund it. 5 For exa mple, although he wa s the CFO at
the tim e, Mr. Agostini wa s not include d in the above mentioned De cember 9, 2010,
co nference ca ll specifically discussing an orga niza tion assessment involving the OC FO .

Although Mr. Gra nt was not directly involved in the drafting of the statement of objectives
for the Organizat ional Assessment Task Order;" he did significantly influence it. In mid­
December 20 10, at Mr. Grant ' s reque st, Mr. Liff ema iled Mr. Grant a prop osal to perform
orga niza tiona l assessments at OPM. 77 Mr. Gra nt the n forwarded thi s same docum ent to
J\1r. Agostini in early Ja nua ry 20 11, inviting Mr. Agostini to ask questi ons or make
        .     78
suggestions.

The document prep ared by Mr. Liff was then give n to an OC FO employee , _
_          as " gu ida nce" in preRa ring the draft statement of objectives for an " initia l
requirement" from Mr. Gra nt. 9 TIle lan gua ge from J\1r. Liff' s proposal was incorporated
into the statement of objectives nearly verbatirn.Y Thus, 1\.1r. Liff aga in pl ayed a
significant role in developing the requirements for a project that had alrea dy bee n
specifically re served for him .

Whe n our investi gators intervi ewed Mr. Gra nt, he portrayed his role as suggesting Mr. Liff
as someone who co uld perform the assessment.81 He ac knowledged that he provided J\1r.
Agostini with informati on about Mr. Lifft s work. 82 Mr. Gra nt indicated that 1\.1r. Agostini
had input into the decision to hir e Mr. Liff for the project and he [1\.1r. A~o st ini] wa s
responsib le for de termining whethe r it wa s appro pria te to hire Mr. Liff. 8 However, ema il
exc ha nge s show that J\1r. Gra nt appeared to have gone beyond simply suggestin g Mr. Liff.
For exa mple, whe n OC FO staff had not yet co ntac ted Mr. Liff' regarding hi s prop osal, :Mr.
Gra nt sent Mr. Agostini two separate emails on a Frida y eve ning specifically requesting
that someone from OC FO contact Mr. Liff on the foll owing Mo nday to discuss the
selection process for the vendor for the task order. 84 Mr. Agostini did eve ntua lly reach out
to Tina McGuire , Direct or of FSC and OPM 's Senior Procurement Executive, and l l
_          " to discuss a possibl e procurement action for a:Mr. Liff. ,,85

1\.1r. Grant co ntinued to chec k in with:Mr. Agostini with regard to the status of Mr. Liff
even after the solicitation pack age wa s sent to Informati on Expert s on Febru ary 8, 20 11,
and the procurement process had begun. In the emails reviewed by our investigators, Mr.

75 Email from Grant to Agostini.v'Triple Che cking ", Dec . 16.2010 , 2:5 1pm

76 Email from Grant to Agostini and Marella. "FW : Org assessment Statement of Work -r upda re", Feb. 4.

2011 , 6:lOpm (requesting that he not be sent the var io us draft statements of obje ctives ).

77 Email from Liff to Grant. "Propo sal", Dec . 15, 20 10, 11:5l am

78 Email from Grant to Agostini "Outline", Jan . 4. 20 11, 7: 10pm

79 Email from _ i to _                   and Esquivel: cc Marella: "Assess ment services", Jan . 31. 20 11, 4:15pm

80 ra. Organiza '""t'io"::T"Assessment Task Order Solicitation Email.

81 Grant Interviews # 1 and #3.

81 Grant Interviews # 1 and #3.

83 Grant Interviews # 1 and #3.

84 Email from Grant to Agostini "Per Favor", Jan. 7, 20 11, 6:15pm: Email from Grant to Agostini "C ould",

Jan . 7, 2011. 7: 10pm

85 Email from _              to "    ; cc McGuire: "Procurement Discu ssion", Jan . 25 , 20 11, 1:13pm

Honorable John Berry                                                                                                 16


Gra nt 's inquiries almost alwa ys specifically referenced Mr. Liff, rather than the
organizational assessme nt project genera lly. 86

OPM ema ils regarding the request for a task order proposal for the organizational
assessment indicated that " higher-ups" within OPM asked _                     " to turn thi s around
in 24 hours.,,81 Ema ils subpoenaed from Information Experts state tha t _
contacted them on February 1, 20 11 (one week be fore the solicitation package was
issuedj " to aga in request assistance in obtaining 1.1r. Lifft s services for the orga nizational
assessment.89 Informati on Expe rts agreed, so long as its own costs were covered in full .90
Its employees were under the impression that "[tjhe directors (John Berry included) at
OPM love Stuart [stc] , so this is a good thing for us to do, although we don 't really get any
ex posure .t''"

We foun d no indication that Director Berry provided any inpu t on the procurement process
that resulted in the hiring of Mr. Liff. Based upon emails and interviews, it appears that at
some point in late 20 10 or early 20 11, OP M senior staff who had int eracted with Mr. Liff
at Mr. Grant' s suggestion, brought Mr. Liffto Director Berry's attention." During our
interview with Director Berry , he stated that he had a positive opinion of Mr. Liff s
experience and ski lls based upon the book by 1\1r. Liffthat 1.1r. Grant provided to huu."
The Director told om inve stigators that he thought hiring a consultant wa s a good idea
because of performance issues within various components within OPM. 94 He infonned
1\1r. Grant that if it wa s appropriate and OPM had the re sources, 1\1r. Liff could be hired .
However , Director Beny thought another consultant could perfonn the work if an
arrangeme nt with:Mr. Liff'wa s not feasibl e.

1.1r. Grant stated that he normally relies upon the heads ofOPM depart ments to handle
daily operations and internal matters and that he was not a microm anager.95 hi contrast,
hi s ac tions revealed that where Mr. Liff' was concerned, 1\1r. Gra nt often became involved
in relatively minor administrative issues. For example, after a delay finalizing paperw ork




86 See, e.g., Email from Grant to Agostini, "Re: Pester", Feb. 1, 20 11, 8:11pm: Email from Grant to

Agostin i, "May I" , Feb. 2 1, 2011. 1O:26am (May I "get spec ifics from you on iff [src] status and tim e1ine by

ll AM tomorrow?" ) (emp has is in original): Email from Gra nt to Agostini "Per Favor", Mar. 4. 2011,

2:30p m ("PLEASE have people commun icating with Liff. . .as agr eed.").

87 Email from_            to _        and _       "RE: Solicitation - OPM Consu lting and Ass essment Servic es

- Request for a'"'i':k'Order Propo sal'·ftb.i4. 2011. 3:31pm

88 Organizational Asses sment Task Order Solicitation Email.

89 Email from _             to Levin and _         cc _       and "     "OPM - Stuart Liff wo rk", Feb. 1,

20 11, 8:11am

90 Id.
91 Id.

91 Berry Interview. See also, Email from Montoya to Grant, Johnson. and Mason. cc _ . "RE Stewart

Liff: Vis it to DC" , No v. 4, 2010 , 1l :37am : Email from Johnson to Montoya and Grant, "RE : Stuart [iff" .

No v. 15, 20 10, 4 :49pm

93 Berry Interview ; Gr ant Interview # 1.

94 Berry Interview.

95 Grant Inte rview s # 1 and #3.

Honorable Jo hn Berry                                                                                                  17


a ffec ted Mr. Liff's travel plans, Mr. Grant contac ted J\.1r. Agostini multiple times to find
out what steps remained and requested that Mr. Agostini help resolve them quic kly.96

1.1r. Grant a lso expressed conceru in M arch 20 11 about how :Mr. Liff specifically wo uld be
a ffec ted if there wa s a Govenunent shutdown (i.e., how he wa s paid, whe the r he would be
able to co ntinue working, and how hi s travel arr an gement s would be affected)." The way
1.1r. Grant phra sed thi s conceru was not about how the proj ect would be affected, but rather
the co nsequences that a shutdown would have upon AIr. Liff'personally .

J\.1r. Gra nt and Mr. Liff also communicated about actions J\.1r. Gra nt could take to assist Mr.
Liff. For exa mple, when the suggestion wa s rai sed that Mr. Liff speak at an upcoming
SES retreat , Mr. Grant told Mr. Liff to " [p]lease include that on your list of things for me
to do on the Liff front.,,98 Mo reover, according to the invoices Mr. Liff submitted to
Information Experts, he met with Mr. Grant on a daily ba sis during the maj ority of the tim e
he spent working at OPM on the organiza tiona l essessmeut. "

While J\.1r. Liff received .Mr. Grant' s personal attention , _      the p roject manager
for the p rime contractor (Information Experts), worked primarily with lower level HRS
program managers and OCFO staff. l oo

Significa ntly , high-level OPM officials, including J\.1r. Grant , Mr. Agostini, M s. Ely, and
1.1r. Esquivel, were often involved in resolving invoice issue s at Mr. Liff's request. 101 M s.
El y and Mr. Esquivel noted that it was not unusual for HRS co ntractors to co ntac t them
about invoice problems. Howe ver, O PM did not have a co ntrac tua l relationship with:Mr.
Liff. OPM ' s contrac t was with Inf ormation Experts, and so the invoice s in question we re
those subm itted by Information Experts to O PM. When these senior offic ials intervened to
secure information or action in these matters, the y referenced Mr. Liff, and not Information
Experts. These senior offic ials instructed subordinates to give Mr. Liff s invoices pri ority
rreatment' F even though HR S wa s stru ggling with a large backlog of'unpaid invoices.'?'

96  Ema il from Grant to Agostini "RE : Tri ed ca lling you". Mar. 16. 2011. 7: 11am; Ema il from G rant to

Agostin i, "FW: Reque sted Info rma tion", Mar. 16, 20 11, 2: l Spm; Email from Grant to Agostini, "RE :

Upda te", Mar. 17, 2011 , 2:14pm.

97 Email from Grant to Agostini "Re ", Mar. 31, 20 11, 12:45pm.

98 Email from Grant to Liff "Update", Ap ril 1, 20 11. 4:33pm

99 Labor invoic es submitted by Stewart Liff & A ssociates to Info rmation Experts dated May 4. 20 11; July I,

2011 : and July 28, 2011.

100 In his interview with the DPM-DIG.                   stated that his DPM co ntacts for the three task orders at

issue were _ _ . ~ proje ct ma nager:                           _ _ , Executive Office. Reso urce

Manageme~O; and _ _ Semor Bl~ DC FO. Email exchanaes

reviewed by the OPM-GIG sup po~ show _ interacting w ith                                                   VM B

Project Ma nager, and _ _ , VM B P roject Manager.

10 1 Emai l from Ely to~ve L "RE : E-Mail from Stew Lift" , Oct. 4, 2010, 5:26pm; Ema il from Ely

to _ , "Re: DOL VETS", Nov. 3. 2 01O, ~            :23 m : E n~ to Liff. "R        . : Pa lent ". Dec. 6, 2010.

3:40pm: E mail from Esquivel to _ and                       cc _ _ . "           and             "Pleas e check on
a late invoice .. .", Jan . 11,20 11 7:26am ; Ema i om Agostini to Grant, "RE : Tri ca mg you." Mar. 16,
2011 , 8:09am; Ema il from Grant to Liff "RE : Requested Info rmation", Mar. 16, 20 11, 8:13am; Email from
Ely to Liff "Re: Payment" , Mar. 29, 2011 , 1O:45am.
102 Emai l from Ely to Sm ith-Heimbrock, "FW : Chec k Nmnber 650", Jan. 1, 20 11, 6:49pm (requesting M s.
Sm.ith-Heimbrock to inquire into a return ed check and a $ 12 late check fee c harged to Mr. Lift) ; Email from
Honorable John Berry                                                                                                   18


Information Experts empl oyees joked that it is " [n]ice to have people in high places"
because Mr. Liff was receiving more informati on abo ut when Information Expert s would
be getting pa id than the company itself wa s. 104


Findings for I ssue #1 -l\Iisuse of Position by Michael G r a nt and Kay Ely

The evidence revealed that Mr. Grant and Ms. Ely misused their positions to give Mr. Liff
preferential treatment. Mr. Liff' s connections with these senior Government officials gave
him, and Informati on Experts, an unfair advantage over other vendors who might have
offered similar services. Furtherm ore, while c ~he expressed wish of Mr. Grant
and 1\.1s. Ely to hire Mr. Liff, Mr. Esquivel and _          gave direc tion to lower level
staff, which resulted in the favored treatment to Mr. Liff. Thu s, OPM employee s and
contractors circumve nted Federa l contracting procedure s.

Mic hael Grant

Our investigators asked Mr. Gra nt whether he pressured OPM employee s to utilize Mr.
Liff s services . J\1r. Grant responded that he be lieves that senior career executives (e.g.,
Associate Directors and other heads of departments) are not pressured or intimidated by
political appointee s beca use these career executives are experienced and are used to
changes in agency political leadership. 105 He believes that the small size ofOPM and the
existence of multi ple, politically-app ointed "advisors/counselors to the Director"
contnibute to thi s dynanuc. . 106

The evidence deve lope d by our investigators, however, indicates that in this case, a
political appointee (Mr. Grant) did indeed exercise influ ence upon career employee s. We
be lieve that :Mr. Grant' s position within the "Office of the Direc tor" carried additional
weight beca use it implies, whether correctly or incorrectly, that his requ ests had the
backing of the Director.

1\.1r. Grant explained to our inve stigators that his involvement occurre d primarily becau se,
in the case of the organizational assessments, 1\.1r. Liff s wo rk wa s in furtherance of
Director Berry' s agency-wi de initiative to addre ss poor performa nce and other
managem ent issues. Wh ile that may be true , the evidentiary record shows that :Mr. Grant


Esquivel to _          and _ r; .c                  . . . and _               "Please check on a late invoice. ..':

Jan . 11, 20 11 7:26a m: En~m                     to Esquivel, ·'RE"'D:r"You talk with Stew Liff re late

payment?", Jan . 13. 20 11, !0:23pm ··1 apo ogize . it slipped thru .. . VMB is unbel ievable with the amount of

work to be done and the amount going on. . .the way things are now , only the most urgent , most important

thing s can be done . This should have been in this category given the leadership connections.") .

103 See, Email from                to Esquivel. "RE : Did you talk with Stew Liff re late payment?" , Jan . 13.

20 11, !0:23pm: E ma       om          to Ely and Esquivel "RE : Stew Liff", Mar . 29 , 2011 , !0:25am: Esquivel

Supplemental Statem ent;             Interview.

104 Email from _ to                   "Stewart Lift" , Mar. 29, 20 11, 12:44pm.

10'; Grant hlte l"\~


106 Id . To clari fy, Mr. Grant appeared to be taking the po sition that the pr esence of multiple po litica l

appointees w ith the same or similar titles dimini she s their ability to intimidate senior career emplo yees.

Honorable John Berry                                                                                            19


demonstra ted a significant interest in finding various proj ects on which Mr. Liff could
work and monitored Mr. Liff' s progress. For example, Mr. Gra nt forwarded AIr. Liff's
p roposal for the organizational assessment to Mr. A gostini, and then requested that J\.1r.
Agostini have someone contac t Mr. Liffabout the project . Practically from its inception,
the organizational assessment task order was viewed as J\.1r. Liff' s particular assignm ent.

J\.1r. Grant also stated to our investigators that he was not advocating for Mr. Liff as an
ind ividua l, but rather for the concepts about which Mr. Liff wrote, and that he believed:Mr.
Liffts services would great ly benefit OPM. to 7 We found no evidence , however , that Mr.
Gra nt was int erested in determining whether there were other contractors who could
perform this type of work. Instead, :Mr. Grant ' s focus wa s always upon Mr. Liff
personally. Inde ed, when inqu iring about the status of the DOL-VETS and Organizationa l
Assessment Task Or ders, Mr. Grant would specifically refer to Mr. Liff - 110 t to the actual
projects themselves.

J\.1r. Grant did not directly participate in the procurement process, and doe s not appear to
have personally violated a specific procurement rule or regulation. For example , he would
ask for advi ce as to the ~oint in the procurement process at which he was allowe d to start
meeting with J\.1r. u rr' 8 However, Mr. Gra nt made obvious his strong desire to hire Mr.
Liff for OPM projects. For example, during hi s second interview with our investigators,
J\.1r. Esquivel reported that Mr. Grant' s persistent focus on Mr. Liff was inap propriate and
made him (Mr . Esqu ivel) feel significantly pressured and as ifhe wa s a "pawn in the
process't.l '" Thi s conti nued at lower levels ofJ-IRS, where ~at he felt
pressured by Ms. Elyl lO and _                 in tum felt pre ssu~ III

The informati on we obtained supports the conclusion that if Mr. Grant had not personally
become involved in promoting :Mr. Liff's advancement at OPM, it is unlikely that he (Mr.
Lift) would have been placed on OPM projects. Absent preferential treatment, the task
orders would have been properly competed amo ng HR S contractors. These HR S
contractors should have had an oppo rtuni ty to be considered for the projects, but were not
because of the unfair advantage provided to Mr. Liff, by wa y of Inform ation Expe rts.
Moreover, taxpayer fun ds wo uld not have been deprived of legal safeguards (i.e.,
competition) in place to prevent the wa ste that occurred in this situation.

KarEly

Ms. Ely also utili zed her position to provide preferenti al treatm ent to Mr. Liff. In ema ils to
her staff, she often invoked J\.1r. Grant and Dire ctor Berry ' s nam es, as well as using phra ses

107 Grant Int erview #3; Emai l from Grant to Ma son, "RE : DPM HRS VA He lP Daily Status repo rt for 25

Mar", Mar. 26, 2010, 7:59am

108 See, e.g., Email from Grant to Esquivel: cc Mason: "RE : Elocharts", Mar. 26 , 2010 . 1:53pm: Email from

Grant to Esqui vel: cc Ely and Mason: "RE : HRS Dail y Status Repo rt 4-6- 10 (VA HCIP)", April 6, 20 10.

5:35pm; Email from Gra nt to Johns on, "RE : I believe", Feb. 27,20 11, 2:58pm: Email from Ely to Grant.

"Green Light" , Mar. 1, 2011 , 11:52am

res Es uivel. Interview #2. See also, Esquivel Interview # 1.

110          Interview #2.

111           Interview s # 1 and #2.

Honorable John Berry                                                                                             20


such as " the fifth floor" (the location of the Director ' s suite of offices) and "Director's
initiative ," to ensure that :Mr. Liff's proj ects and needs were given high priority. Whi le she
did not specifically request that laws or regulations be circ umvented, ema il corresponde nce
indicates that Ms. Ely, who had considerable pro fessional expertise in Fede ral contrac ting,
knew what ac tions he~were taking, and yet did not objec t. lI2 In fact, she
specifically approved _                  suggestion of utilizin g an8(a) pass-through vehicle in
orde r to obtain Mr. Liff' s services for the DOL-VETS Task Orde r, which is how Mr. Liff
first became involved with OPM. lI3

Furthenn ore, Ms. Ely failed to prom ote and enforce complia nce with Federal contrac ting
rules and regul ati ons within HRS. Nearly eve!)' Federal agency interacts with HRS.
Therefore, any mismanagement within HRS has a Government -wide effect. Consequent ly,
a critical responsibility of the HRS Assoc iate Director is to ensure that procedures are in
pl ace - and followed - to safeguard the vast amount s of Federa l funds that flow through
HRS. It wa s Ms. Ely 's responsibility to properly oversee this program , not simply to grow
its revenue base.

Moreover, it wa s also Ms. Ely 's responsibility to inform senior OPM officials who lack
contracting expert ise, such as 1\11". Gra nt, as to whet her the results they sought could be
ac hieved in accordance with proper contracting procedures or whether their act ions would
otherwise adversely affect the procurement process. In this situation, however, she failed
to do so.

Other OPM Emplovees

The failure to ensure compliance with Federa l contracting law and to safeguard taxpayer
dollars continued down the HRS leadership chain. :Mr. Esquive l carrie d out Mr. Gra nt and
Ms. Ely 's requests without objection, adding his weight to the pressure placed upon
subordinates. _            stated that he attempted to pu sh back against leadership , but
ultimate ly passed the same message to "get Mr. Liff" to his subordinates . 114

Tills eventually resulted in lower level employee s carrying out instru ctions which
comp romised the pro cureme~ . Beca use ofMr. Grant and Ms. Ely's actions, HR S
representatives, specifically _            and              circumve nted the compe titive bid
procedures in order to guarantee access to :Mr. Liff, after Mr. Liff was specifically
identi fied as the desired contrac tor by senior OPM officials. No mea ningful effort wa s
made to determine whether there were more economica l and efficient options avai lable to
meet the needs of OPM or DO L-VETS .


112 See, e.g., Email from _        toEIy; ccEsquivel; .•RE: Voicema il", Sept. 2, 2010 , 2:48pm ("The easy
an swer is yes we can hel~with Mr. Liff if we go through an Sea) vendor on om contract."), contained in
Ema il One in Appendix: Email from' " to Esquivel: cc Ely: " Mr. Lift" , Sept. 2. 2010 . 3:15pm..



                                                                      _e
contained in Ema il Three in Appendix; Email from _          to Ely: cc Esquivel: "RE : New issue," Mar . 15,

2011 , 2:02pm.

11l Emai l Three in Appendix.

l a In addition to emails cited throughout tins interim report, see also        and "       Intervie\\'s: _

Interviews # 1 and #2. See also, .      Interview.
Honorable John Berry                                                                                         21


Moreover, Ms. McGuire likewise failed to fulfill her responsibility as Director of FSC to
ensure complia nce with Federal contracting rules and regulations at OPM, which will be
discussed in the next section of this report.


                      ISSUE #2: MISMANAGEMENT WITHIN HRS

Juni or HRS and FSC employee s informed us that the pressure they felt focused primarily
upon executing task orders quickly. lIS In this particul ar case, it appea rs that closing dea ls
and pleasing customers were considered more impo rtant than observing the contrac ting
regulations and procedures in place to ensure transparent and careful use of taxpayer funds.
Tills pressure escala ted dra matically when senior OPM officials expressed strong interest
in particular task orders.


Failure of F SC to Oversee HRS Contr acts

In the summer of20 l0, HR S and FSC reorgani zed to ensure that HRS 's VM B had
sufficient support from FSC's contracting experts. hi response to an OPM-OIG September
2011 Final Audit Report related to HR S compliance with Federa l contracting law, 116 Ms.
McGuire stated that structural changes were made within both HRS and FSC. Spec ifica lly,
she informed our auditors that " [s]ince July 20 10 VM B has not had an internal contracting
ope rarionv. l' " Instead , VM B "has been working collaborativel y and with the guidance of
FSC acquisition staff comply [sic] with all FAR requirem ents to meet the operational
needs ofVl\.IB in the area of acquisition.v'P However, all FSC employees to whom our
inve sti~ators spoke denied exe rcising any meaningful oversight of the se particular task
orders. 19 Instead , the contract ing office rs appear to have simply processed the paperwork
generated by HRS.

The evidentiary record compiled by our investigators reveals that both Ms. McGuire and
                knew that there were problems re lated to the Orga nizationa l Assessme nt
Task Order and simply passed off responsibility for those problems to HR S, despite FSC' s
earlier insistence that it had begun to playa greater role in HR S' s affairs.

In early Febru ary 20 11, Ms. Ely raised a conce rn with                and Ms. McGuire
about the statement of objective s issued for the Organizational Assessment Task Order
beca use it menti oned J\1r. Lifft s book s. She wondered in an email, "Maybe a very direct

m _ _ , and "                       Interviev: s; _         Interviews # 1 and #2 .

116 OPM-OIG"F'::T"'Audit Repo rt : Audit ofthe U.S. Office of- Per sonnel Management 's Human Resources

Solutions' Vendor Management Branch. Report Number 4A -HR-OO-II -012 . Sept. 30.2011 , ami/able at:

http ://wv.'W.opm.gov/our-iuspector-generaVreports/2011/audit-of-the-u s-office-of-personnel-managements­

human-resources-sofution s-vendor-management-branch,pdf (hereinafter. "O PM-OIG VMB Aud it Report").

111 Memorandum from Ms. McGuire to _ _ . "Dra ft Report on the U.S. Office of Personnel

Management's Vendor Management Br~o . 4A-HR- OO- I I-0 12", June 15, 20 11, contained in

Appendix B ofthe DPM-GIG VMB Aud it Report.

118 Id .

119 _          . _, McGuire. and _                  Interview s.

Honorable John Berry                                                                                          22

que stion to Micha~CFO is a goo d next steg? I wi ll help in any way I can - j ust
let me know.,,120 _ re sponded "Will do." 1

Apparently                  thought that this issue was important enough that he informe d
1.1s. McGuire of it, asking, "Hey, have you taken a look at the SOW [statement of work]
for the "Stewart Liff" requirement? They have a reference to his books in the 'Contrac tor
furni shed Mater ial' section . Are they crazy or is it j ust me?" 122 Ms. McGuire responded
that she had not seen it, but had heard about it from Ms. Ely.123

Despite the concerns expressed by HRS and FSC leadership , nothing wa s done to correc t
the statement of objec tives, either before or afte r the solicitation package wa s issued . In
inte rviews with our inve stigato rs, Ms. Ely and                  eac h explained that the
qua lity of the statement of objectives for this project wa s not their responsibility and eac h
assumed that someone else had corrected the problem or approved the docum ent as it
wa s. 12.

We are concerned that HR S and FSC leadership may have been more concerued about the
app earance of following proper c ont~dure s rat her than actual compliance. As
menti oned earl ier, Ms. McGuire and _                  had bee n approached in late Ja nuary
20 11 by Mr. Agostini about hiring J\.1r. Liff specifi cally, 125 while Ms. Ely knew that
Information Experts had been explicitly asked to subcontract work to Mr. Liff on the two
prior task orders. These facts suggest that they likely kne w that the Organizat ional
Assessme nt Task Or der wa s intended to go to Mr. Liff without competition. Wh ile Ms.
Ely, Ms. McGuire , and                  expressed concern over the paperwork, we did not
find any ema ils or other evidence showing a similar conceru abo ut the preferential
treatm ent that Mr. Liff was in fact receiving and whic h severely compromised the
procurement process.

Later that same month, when there were disputes over the funding and the docum entati on
for the Organizat ional Assessment Task Order, Ms. McGuire pa ssed off all responsibility
for the contract to Ms. Ely in an ema il that simply stated ..Tagyou're it... 126

These actions by senior HRS and FSC offic ials show that despite the reo rganization 's goal
of improving HRS' s compliance with the FAR, FSC' s increased involvement still failed to
provide adequate oversight of the HRS task order award process when:Mr. Liffwa s
involved.




Ill)Email from EI                  cc Mcrjuire: "Re: Asse ssment services" , Feb. 8. 20 11. !0:12am.
111 Emai l from            to E y; cc Mcrjuire: "Re: Asse ssment services" , Feb. 8. 20 11. !0:15am.
112 Email from             to McGuire. "RE : 8(a) STARS II Upd ate", Feb . 9, 2011 , 9:58am
III Email from Mccnure to _               "RE : 8(a) STARS II Upd ate", Feb . 9, 2011 , !0:00am
114 _         Interview: Ely Interview #1.
m E:::~r';~l1n_ to "                 ; cc Mc-Guire: "Procur eme nt Discu ssion", Jan. 25,2011 , 1:13pm (Mr.
Agostin i had w~dis~            SS a ssible pro curement actio n for a Mr. Liff.").
116 Email from McGu ire to                Ely, Esquivel and Roman, "Re: Solicitation - DPM Consulting and
Ass ess ment Serv ices - Request or a Task Order Proposal" , Feb. 24. 20 11, 2:03pm.
Honorable John Berry                                                                                       23


Disregard of Fair and Open Competition

One of the most basic tenets in Federal contracting is that all “Government business shall
be conducted in a manner above reproach and, except as authorized by statute or
regulation, with complete impartiality and with preferential treatment for none.” 127 The
evidence developed by our investigators suggests that the principles of fair and open
competition were not adequately applied to any of the task orders on which Mr. Liff
worked. When the question of placing Mr. Liff on an OPM contract was first raised, HRS
and FSC managers recognized that he might not secure a contract through the competitive
process or qualify for a sole-source contract, and so instead focused solely on identifying
and applying the means by which to award him the work noncompetitively. OPM
circumvented the competitive process in order to direct work to a single individual.

One Information Experts employee captured the importance of open and fair competition
with his comments about the DOL-VETS Task Order. When he first read the solicitation,
he noted that the company did not have anyone with the skills specific to the DOL-VETS
statement of objectives. He then wrote, “It appears a lot of this is contingent on the
consultant having a wealth of knowledge in VETS? [sic] Wouldn’t new ‘fresh’ eyes be the
better choise [sic] since it appears they are looking for total direction [sic] and a near 100%
change in process or paradigm?” 128


Failure to Safeguard Taxpayer Money

We believe that this situation involved a waste of taxpayer money because the evidence
suggests that merit and cost were not meaningful factors in the award of these task orders.
It appears that Information Experts and Mr. Liff did not base the price estimates for these
task orders upon the work to be performed, but rather the amount of money that they
wanted to earn from the projects. For example:

      •   DOL-VETS Task Order: When preparing his cost estimate, Mr. Liff was informed
          that the highest hourly amount that Information Experts could charge for him under
          its contract with OPM was $205. Consequently, Information Experts instructed
          Mr. Liff to reduce his rate of     to $205, and increase his hours in order to arrive
                             129
          at the same price.

      •   HRS Training Task Order: Initially, Mr. Liff told OPM that he would perform the
          presentation for $6,000 plus travel costs. 130 Information Experts and Mr. Liff
          negotiated an agreement whereby Mr. Liff would accept approximately $6,000

127
    48 C.F.R § 3.101-1.
128
    Email from          to           and         , “RE: Solicitation - DOL VETS Consulting Services. OPM
Small Business Set Aside Program”, Sept. 9, 2010, 4:09pm.
129
    Email from        to Liff, “costs”, Sept. 14, 2010, 1:56pm.
130
    Proposal attached to Email from Liff to Fredrick, “Re: Possible One Day Presentation to the HRS
Solutions (Kay and Frank’s Organization) SES group and Managers. Nov 2, 2010.”, Sept. 13, 2010, 6:15pm;
Email from         to       “RE: Solicitation – OPM Improving Performance of Government Employees”,
Sept. 22, 2010, 5:24pm; Email from          to          “RE: IPGE”, Oct. 14, 2010, 1:57pm.
Honorable John Berry                                                                                  24


          (inclusive of travel) and Information Experts would retain the remainder charged to
          OPM. 131 In discussing the pricing arrangement for that project, an Information
          Experts employee wrote “I don’t want to burn ANY real time on this…It’s
          basically a gimmee…I am hoping we won’t even need to attend a kickoff
          meeting.” 132

      •   Organizational Assessment Task Order: When working with Information Experts
          to develop the cost estimate, Mr. Liff suggested that “[i]f we need to make the price
          more palatable, we could add another say 200 hours or so to the estimate, and then
          reduce the hourly rate by 10% to get the same final number.”133
The amount of these three task orders was $449,237. The following table reflects how
these amounts were to be divided between Information Experts and Mr. Liff, based upon
our review of documents subpoenaed from Information Experts.




131
    Email from        to        cc     ; “FW: Solicitation – OPM Improving Performance of
Government Employees”, Sept. 24, 2010, 8:41am.
132
    Id.
133
    Email from Liff to Liff and      cc      and                    ; “Re: OPM consulting project”,
Feb. 10, 2011, 1:36pm.
Honorable John Berry                                                                                          25



                              Total Amount of                Amount of
                                                                                    Difference Between
      Task Order             Contract between           Subcontract between
                                                                                    Total Contract and
                                 OPM and                    Mr. Liff and
                                                                                        Subcontract
                            Information Experts         Information Experts
                                                                                         Amounts


DOL-VETS                           $110,519                 $93,732 (85%)              $16,787 (15%)


HRS Training                        $7,470                  $5,985 (80%)                $1,485 (20%)


Organizational                     $331,248              $176,799 (53%) 134            $154,449 (47%)
Assessment *


Total                              $449,237                $276,516 (62%)             $172,721 (38%)

* The original period of performance for the organizational assessment project was February 2011
to March 2013. Under the original proposal submitted by Information Experts, the company was
to be paid $808,592 and Mr. Liff was to receive $626,027. However, OPM entered into a contract
with Information Experts for $331,248 for it to perform only the initial phases of project. OPM
exercised its right to terminate the contract in August 2011. The figures listed in the table for the
Organizational Assessment Task Order are based upon that contract, the subcontracts between Mr.
Liff and Information Experts, and invoices submitted by Mr. Liff to Information Experts.
**The DOL-OIG found that DOL-VETS paid almost $710,000 to obtain Mr. Liff’s services for a
period of 16 months. This amount includes the DOL-VETS Task Order listed in this table. 135


When OPM requested information as to the percentages of work performed by Mr. Liff
and Information Experts employees respectively on the DOL-VETS and Organizational
Assessment Task Orders, one Information Experts employee asked Information Experts
executives, “[S]hould I just be honest with them? I mean Liff was the sub[contractor] and
we were the prime, but as the SME [subject matter expert] he did a brunt of the work. I
proofread and did his invoices, that was it.” 136 Information Experts subsequently reported




134
    Labor invoices submitted by Stewart Liff & Associates to Information Experts dated April 2, 2011, May
4, 2011, July 1, 2011, July 28, 2011, and August 19, 2011; Travel invoices submitted by Stewart Liff &
Associates to Information Experts dated May 5, 2011, July 3, 2011, and August 7, 2011; Email from
to Maktabi, “FW: Stewart Liff Payments – OPM Consulting and Assessment”, Dec. 9, 2011, 11:56am.
135
    DOL-OIG Report at pages 21 and 26. The DOL-OIG concluded that DOL-VETS had paid
approximately $230,000 for the services performed by Mr. Liff through Information Experts. This figure,
however, also includes the amounts charged by HRS for the work it performed and expenses it incurred
related to this project, in accordance with the interagency agreement between DOL and HRS. In contrast,
this chart contains only those amounts related to the work performed by Information Experts (and Mr. Liff).
136
    Email from             to Maktabi, “FW: HRM Report Deliverable”, Sept. 7, 2011, 12:43pm.
Honorable John Berry                                                                                            26


to OPM that Mr. Liff performed approximately 80 percent of the work on each of these
task orders and Information Experts employees performed the remaining 20 percent. 137

Our review of emails from Information Expert revealed other disturbing statements. When
reviewing a list of projects on which Information Experts worked, one Information Experts
employee commented that “we did a lot of OPM pass throughs and those just are not much
of anything.” 138 The company even faced the problem of determining how to factor in
profits from pass-throughs when calculating an Information Experts employee’s annual
bonus and Mr. Liff’s work was cited as an example of such a pass-through. 139


Findings for Issue #2 - Mismanagement within HRS

The evidence developed by our investigators revealed that the mismanagement within HRS
significantly contributed to a situation where taxpayer funds were directed to a specific
individual without the protection afforded by the competitive bid process. Speedy award
of the task orders and satisfying these customers appeared to be the primary operational
concerns. 140 Moreover, to the extent FSC employees paid attention to these HRS task
orders, we did not find that they attempted to enforce compliance with contracting law or
to stop the unfair and inappropriate practices that occurred. We are concerned that a
culture may develop within these departments where the type of improper behavior
uncovered in this investigation is deemed to be acceptable.

Given the information obtained from documents subpoenaed from Information Experts, we
are concerned that the use of 8(a) companies as pass-throughs to hire a preferred vendor
may be common practice within HRS. Use of pass-throughs increases the risk that the
Federal Government will be charged an amount that is based upon contractors’ profit goals
rather than the best value available to the Government.

We are seriously concerned by the lack of stewardship of taxpayer funds revealed in this
case. No one appeared to have considered whether the Government was receiving the best
value for its money: Mr. Grant and Ms. Ely focused upon hiring Mr. Liff; Mr. Esquivel
and              provided the necessary directions to their subordinates to accomplish this;
and lower level employees carried out those instructions in an effort to please their
supervisors. As a result, economy, efficiency, and merit were not meaningful factors in the
award of these task orders. The unfortunate outcome was that taxpayer dollars were
directed to a specific, favored vendor without the justification required under Federal
procurement rules and regulations.



137
    Email from Maktabi to               ; cc Levin and           “Re: HRM Report Deliverable – Please
review.”, Sept. 9, 2011, at 2:24pm.
138
    Email from          to         “RE: PPS and Core Services.xslx”, July 10, 2012, 7:38pm. It should be
noted that in the attached list, there were multiple projects (in addition to those on which Mr. Liff worked)
that were labeled either “pass throughs” or “OPM pass throughs.”
139
    Email from Levin to Maktabi, “Please review”, July 18, 2011, 3:28pm.
140
    Ely Interview #2. See also,              ,         and          Interviews.
Honorable John Berry                                                                             27



                                 RECOMMENDATIONS

As the result of our investigation, we make the following recommendations:

Recommendation #1

We recommend that OPM consider appropriate administrative action to address the
employee misconduct identified in this report. If OPM requires copies of referenced
evidence concerning specific employees in order to take administrative action, please
contact our office.

Recommendation #2

OPM should ensure that the current and future HRS Associate Directors, FSC Directors,
and senior staff in those organizations fully understand their responsibilities with regard to
OPM’s compliance with Federal contracting law, including their obligation to advise OPM
officials who are not contracting experts and to report violations of which they become
aware.

Recommendation #3

We found that the restructuring of responsibilities between HRS and FSC failed to achieve
the stated goal of bringing HRS into compliance with Federal procurement procedures.
We understand that additional controls and procedures have been instituted since the 2010
reorganization. In light of the findings of this report, however, OPM should revisit the
current procedures and processes used by HRS and FSC to ensure that they are fully
compliant with the FAR.

Recommendation #4

Given that OPM utilized an 8(a) firm to circumvent proper contracting procedures, OPM
should conduct a review to determine if there are additional instances where 8(a) firms are
being used as pass-throughs in a similarly inappropriate manner. Moreover, OPM should
consult with SBA to ensure that HRS’s interactions with 8(a) firms are conducted in
accordance with SBA’s regulations and the FAR.
APPENDIX
                                          EMAIL ONE

From: Ely, Kay
To:
Cc: Esquivel, Frank O.
Subject: Voicemail
Sent: Thursday, September 02, 2010 12:50 PM

Did you get my voicemail from earlier today? I am trying to follow up on the letter (from       )
that the Department of Labor received regarding the use of the TMA [now VMB] contracts for
what I am guessing is end of the year services and includes a subcontractor they are interested in
and have used already.

I need the details and soonest. Thanks, Kay



From:
To: Ely, Kay
Cc: Esquivel, Frank O.
Subject: RE: Voicemail
Sent: Thursday, September 02, 2010 2:48 PM

Sorry as I was working a VA issue and I am just now sitting down. My apologizes. [sic]

The easy answer is yes we can help them with Mr. Liff if we go through an 8(a) vendor on our
contract. We had sent an email to Amit Magdieli on Tuesday letting them know we should be
able to support them with our only concern being the SOW [statement of work] that was sent to
us sounds an awful lot like a personal services contract. We offered to help evaluate the SOW if
they would like so we could move forward.

    had already sent another email to follow up with Mr. Magdieli this morning before I got to
work as we had not heard back yet from Tuesdays [sic] email.

What I really found funny though is I had not even thought about my voicemail still having me
as a                           ……….You can tell I am on the stick!

If you have any questions please feel free to call




Office of Personnel Management
Chief, Vendor Management Branch
1900 E St. NW, Room 1453
Washington, DC 20415-0001
From: Ely, Kay
To:
Cc: Esquivel, Frank O.
Subject: RE: Voicemail
Sent: Thursday, September 02, 2010 3:43 PM

Also let me know when it is truly good to go, signed on the dotted line and the customer has the
contractor back on board, etc. Then I can pass it along.




                                      [End of Email One]
                                               EMAIL TWO



From: Adam Levin
To :
Subject:       [sic]

Sent: Thu rsday, September 02 , 2010 2:08 PM


My calls are bei ng dropped . Can I call you after 230?


Sent using Blackberr y




From:
To : Ada m Levin
Subject: RE :
Sent: Thu rsday, September 02 , 2010 2:56 PM

His name is Stewart Liff. Home office is ' ' ' and cell is                                     He 's in
Califoru ia and he has a website. Thanks .



From: Adam Levin
To :
Subject: RE :
Sent: Thu rsday, September 02 , 2010 5:14 PM

I have spoken with Stewa rt and will have a Teaming Agreeme nt to him short ly.

Ada m Levin
Exec utive Vice President




www.infonnationexpert s.com
A mem ber of the 2009, 2010 Inc. 5000: the fastest growing privately held companies in America

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please notify me imm ediately by reply e-mail and then delete this message. including any attachm ents.
From: _
To : A ~
Su bj ect: RE :

Sent: Friday, September 03, 2010 8:32 AM


Great. I'll set things in motion here .   II

From: Ada m Levin
To :
Subject: RE :

Sent: Friday, September 03, 2010 9:27 AM


The TA [Teaming Agre ement] has been fully execut ed .


Ada m Levin

Exec utive Vice President





       orm ano nexpert s.com
WWW. lll
A mem ber of the 2009, 2010 Inc. 5000: the fastest growing privately held companies in America

NOTICE: The infonnarion contain ed in this email and any document attached hereto is intended only for
the named recipient(s). If you are not the intended recipient. nor the employee or agent responsible for
delivering rhis message in confidence to the intended recipi entts). you are hereby notified that you have
received this transmittal in err or. and any review. dissemination, distribution or copying of this transmittal
or its attachments is strictly prohibited, If you have received this transmittal and/or attachm ents in error,
please notify me imm ediately by reply e-mail and then delete this message, including any attachm ents.



From: _
To : A ~
Subject: RE :

Sent: Friday, September 03, 2010 9:46 AM


Great Thank s.




                                           lEnd of Email Two)
                                          EMAIL THREE



From:
To: Esqui vel, Frank o .
Cc: Ely, Kay
Subj ect: Mr. Liff
Sent : Thursday, September 02 , 2010 3:15 PM

_          j ust stopped by and we have M r. Liff'under the 8(a) vendor Informati on Expert s and
will have this completed either t OlllOITO W or Tuesday at the latest. Just FYI as I know Mr. Grant
wa s looking int o this also.



•
FrO    El , K
            _  3 :
To
Cc:              ; Esquivel, Frank 0 .;
Subj ect: RE : :Mr. Liff
Sent: Thursday, September 02, 2010 4:23 PM

I just talked with .   and it makes sense to rethink our procure ment strategy . Based all this
new information instead of a so le sourc e we should use our own vehicle and thi s will also help
with OPM 's 8a credit.

I need someone to start working thi s a ll beha lf of HRS to bring the IE/Liff tea m a ll board . This
is separate and apart from the task for DOL. There are a variety of things we need assistance in
and the work is very similar to what is being done at Labor.

So .     at least that lets you off the hook for writing up the sa le source justification.



From:
To:~

Cc: _             Esquivel, Frank 0 .;
Subj ect: RE : :Mr. Liff
Sent: Thursday, September 02 , 2010 4:59 PM

All,

Agreed as we are brin ging Mr. Liff on throu gh one of am OPM 8(a) contractors (form erly un der
TMA and now under VMB) so we will get the credi t. Is this what you are asking? If not I am
truly SOllY for being slow.
If you have any questions ple ase feel free to call



•
Office of Personnel Management
Chief, Vendor Management Branch
1900 E St. N\V, Room 1453
Washin on, DC 204 l5-Q001




Fr    :El o
          .Ka .
To :

Cc :           , Esquivel, Frank 0 .;

Subject: RE : Mr. Liff

Sent: Thursday, September 02, 2010 9:55 PM


Yes that is what I mean. Although not my first preference it is pro bably the most efficient. Just
a note too - although we renamed the branch as vendor management keep ill mind the contracts
are still an IDIQ known as TMA. A reorganizaiton cannot change the way these contracts were
competed and what title. I only menti on it now because I have heard it before and we need as a
group to keep that in mind . Until we recompete these contracts they are "TMA" even though they
are housed under VJ\1B . Make sense? Thanks all, Kay




                                       lEnd of Email Three]
                                        EMAIL FOUR



From: VMBTOC
To: ‘opmvmbtoc@informationexperts.com’
Subject: Solicitation - DOL VETS Consulting Services. OPM Small Business Set Aside
Program
Sent: Wednesday, September 08, 2010 11:30 AM


Greetings, Information Experts:

This is a small business set aside program. Please let us know if you are interested. You can
also contact                 directly at               or



TOC Schedule of Events

              Event                      Schedule             Responsible Party
RSVP to VMBTOC@opm.gov             September 9              Vendors
by 3:00 p.m.
Questions submitted to             September 9              Vendors
VMBTOC@opm.gov by Noon.
Responses to questions returned    September 10             OPM
to contractors.
Written Proposals submitted to     September 15 by 3:00     Vendors
VMBTOC@opm.gov.                    p.m.

Technical Evaluation Panel         September 16 -17         Client and OPM

Down select and Oral TOC           TBD                      OPM
Invitation emailed to 3 to 5
contractors selected to compete.
The Government reserves the
right to make an award based on
your initial offer.

Oral Task Order Competition, if    TBD                      Client, OPM, Selected
required by the Government.                                 Vendors

Award Made                         September 21             OPM
Project Kick-Off Meeting             TBD                       Client, OPM, Selected
                                                               Vendor

Thank you,

Center of Excellence (CoE)
U.S. Office of Personnel Management
1900 E Street, NW, Room 1453
Washington, D.C. 20415
Email: VMBTOC@opm.gov




From:
To: Adam Levin
Subject: FW: Solicitation - DOL VETS Consulting Services. OPM Small Business Set Aside
Program
Sent: Wednesday, September 08, 2010 6:28 PM




From: Adam Levin
To:           ; Moe Baker Maktabi;
Subject: Fw: Solicitation - DOL VETS Consulting Services. OPM Small Business Set Aside
Program
Sent: Wednesday, September 08, 2010 6:34 PM


This is a GO. This is set up for us and was only sent to us.
--------------------------
Sent using BlackBerry




                                    [Continued on Next Page]
From: Adam Levin
To:            Moe Baker Maktabi;
Subject: Fw: Solicitation - DOL VETS Consulting Services. OPM Small Business Set Aside
Program
Sent: Wednesday, September 08, 2010 6:38 PM
Importance: High

I have the partner lined up for this.
--------------------------
Sent using BlackBerry



From:
To:
Subject: FW: Solicitation - DOL VETS Consulting Services. OPM Small Business Set Aside
Program
Sent: Thursday, September 09, 2010 9:46 AM
Importance: High

Good morning,

This is one we are going after that has apparently been set up for us.. It has HC [human capital],
dev [development] and a whole host of other elements. Our sub[contractor] is Stewart Liff who
is mentioned in the SOO [statement of objectives] in the paragraph I copied below. He is based
in California.

               will be the PM [project manager] for this proposal. Its due very quickly and
questions are due today

Using a Visual Management approach, as described in the management book co-authored by
Stewart Liff and Pamela A. Posey, the Consultant will guide the redesign of the National
Office physical plant, working where necessary with VETS and DOL personnel, contractors,
Veterans and stakeholders




                                        [End of Email Four]
                                            EMAIL FIVE


From:
To : Ada m Levin
Subject: Another Liff reque st
Sent: Wednesday, September 22 , 2010 10:09 AM

Ada m ,

I will be sending an other " pass -thro ugh" for Mr. Liff. Thi s tim e OP1.1 11eeds him for a one da y
presentation. I'll get the sa o [statement of objectives] and fan nal solicitation out to you thi s
week. Just wanted to give you a heads up. You okay with this???? I want to be sure before we
send it to only IE .

Thank you,



•
Sf. Project Ma nager
U.S. Office of Personnel Management
VMB 's Center of Exce llence (CoE)
1900 E Street, NW, Suite 1453
Washingto n, D.C. 204 15




From: Adam Levin
To:
Subject: Re: Another Liffrequest
Sent: We dnesday, September 22 , 20 10 10:28 AM


We are good. Send to m y attention.

Sent usin g BlackBerry
From:
To : Adam Levin
Subject: Re: Another Liff request
Sent: Wednesday, September 22, 2010 10:37 AM

Great ! My Sf\,1£ [subject matter expert] is wo rking the SOO [statement of objectives] now and I
should have it by morning. Wha t a relief. Thi s has our Director 's attention . THANK YOU!

Thank you ,



•
                                      [End of Email Five]