A tranche of major federal agencies have nearly met a Sept. 30 deadline requiring them to build out and adopt a degree of zero trust architecture on their networks, federal CIO Clare Martorana said Wednesday.
The zero trust cybersecurity model is a methodology where users on a network are never inherently trusted and must be regularly verified to be allowed access into sensitive systems and webpages.
The 24 CFO Act agencies — federal regulators affected by a 1990 law that gave the White House new authorities to oversee the government’s financial management — are “all in the high 90% range” and, more broadly, federal entities “moved from 81% to 87% completion rate for agencies on that journey,” said Martorana, who did not specify an exact timeline to when the jump to 87% was made.
There is no one single zero trust solution available for agencies to procure. But several private firms specializing in specific zero trust pillars have been working for years to secure contracts with agencies since a major cybersecurity executive order was signed by President Joe Biden in 2021.
The Cybersecurity and Infrastructure Security Agency in May provided agencies guidance to meet website encryption requirements and move closer toward their zero trust goals.
Zero trust isn’t a one size fits all approach because nation-state adversaries and cybercriminals can still innovate and find workarounds that allow them to breach architected systems.
“It is a continued journey that the government is going to undergo for many years,” Martorana said.
The May 2021 executive order directed all federal agencies to develop a plan for implementing zero trust strategies. The Office of Management and Budget later issued a memo in January 2022 that, in part, required agencies to undertake a series of steps by the end of fiscal 2024 “to form a starting point to implementing zero trust architecture.”
Federal cyberdefenses became a top issue for the Biden administration after the Colonial Pipeline and SolarWinds Orion incidents that occurred in the past couple years. Other headline-making hacks have followed, including last summer when Chinese operatives accessed the email inboxes of U.S. officials, which later became the subject of a major DHS oversight report.
The U.S. Postal Service successfully implemented most of its initiatives in response to increased demand during fiscal 2024’s peak season; however, service performance scores for most of its products decreased during the same period.
In a report published on Aug. 26, the postal inspector general found that USPS — with respect to the period last year between Thanksgiving through New Year’s Eve — met some processing and distribution goals, all logistics ones and most related to retail and delivery.
For example:
It accurately forecasted the demand on its air network for 99.4% of peak season.
For surface transportation, USPS increased efficiency by reducing the number of trips by 14.9%, an approximate 6% reduction compared to peak season fiscal 2023.
USPS management said staffing was not a major issue, as they hired about 12,000 employees, 81% more than the planned number of nearly 6,800. (The OIG reported this was not a sign of poor planning partly because additional hiring was necessary at some facilities to perform work that had been done by contractors.)
But service performance declined for most USPS products compared to the previous peak season and none met performance targets.
First-class mail, for instance, was delivered on time 83% of the time, which is a 5.4% reduction from fiscal 2023 and 9.5% less than the 92.5% target. Competitive products, like priority mail, experienced relative declines, but the OIG didn’t provide specific numbers.
While USPS processed packages more efficiently in fiscal 2024 by reducing the number of parcels handled manually, the OIG reported a 23.3% increase in delayed inventory compared to fiscal 2023. (Such delays mean a processing plant failure and not necessarily a delay in arrival time.)
The inspector general, however, acknowledged that severe weather and unanticipated processing facility closures affected delivery as well as operational changes under USPS’ 10-year plan.
The Postal Regulatory Commission has called on Postmaster General Louis DeJoy to pause reform efforts under his 10-year plan due to difficulties that occurred after some changes were rolled out. Members of Congress from both parties have also criticized the reforms.
The OIG recommended that USPS evaluate the plan to effectively manage operational precision performance, a daily measure of how close each processing facility ran according to plan, during peak season. The postal agency concurred with the recommendation and set an implementation date of Nov. 30.
Looking ahead to peak season fiscal 2025, USPS’ primary air network supplier is changing for the first time since 2001. The OIG warned that planning ahead will be critical to ensure peak season deliveries are made on time.
The Biden administration has requested that Congress ensure spending on election security and presidential transition efforts can continue in the absence of a deal in Congress to fund the government in fiscal 2025, as well as the unusual step of reiterating its full budget request for the Social Security Administration, as the White House and lawmakers prepare for the possibility of needing a continuing resolution to keep the government funded past September.
Each August, as lawmakers inevitably run short on time to reach an agreement on how to fund the government for the next fiscal year beginning Oct. 1, the Office of Management and Budget sends a list of so-called “budget anomalies” that the White House would like included in a short-term continuing resolution.
Often, anomalies include items like renewing spending authorities and other short-term fixes for ongoing government programs or to ensure funding is available to implement planned initiatives during the term of the continuing resolution.
OMB submitted its list of requested budget anomalies to Congress last week. In the 30-page document, the Biden administration took the unusual step of requesting that the Social Security Administration’s administrative functions be funded at the rate of the president’s fiscal 2025 budget proposal of $15.4 billion. Without such an anomaly, the agency’s operations would continued to be funded at its current annual appropriation of $14.2 billion under a continuing resolution.
In its submission, which anticipates the need for a continuing resolution until “mid-December,” the White House said without additional funding, SSA will hit a half-century staffing low before the end of the CR.
“Language is needed to provide the Social Security Administration a rate for operations of $15.4 billion in the Limitation on Administrative Expenses account in order to improve current levels of customer service and avoid the lowest staffing levels in more than 50 years during the period of the CR,” OMB wrote. “SSA continues to face increasing workloads across its operations, and call volume typically peaks during the first quarter of the fiscal year.”
The message also includes a clearer picture of how a flat budget would further deteriorate service at the beleaguered agency: worse IT support for employees, the closing of some local field offices and the shortening of hours at others.
“Without the anomaly, SSA would be required to reduce funding for core information technology operations, including SSA’s network support,” the administration wrote. “In addition, SSA would likely reduce the hours field offices are open to the public and would need to close field offices over time, extending wait times for seniors and individuals with disabilities.”
The Social Security Administration is funded differently from most other federal agencies. The cost of administering Social Security retirement and disability benefits is paid for not through the U.S. Treasury, but directly from federal payroll taxes. For decades, that budget was set at 1.2% of benefit outlays, until President George H. W. Bush made it part of the discretionary budget process, and in recent years it has slid down below 1% of benefits.
Biden’s request is also noteworthy in that it remains higher than either chamber has thus far set aside for the agency in fiscal 2025. The appropriations bill in the Republican-controlled House calls for a $450 million cut from current funding levels next fiscal year, while the Senate’s legislation would impose a half-billion dollar increase.
The administration’s anomalies request also includes provisions that would ensure that the Presidential Election Campaign Fund and both the White House’ and General Services Administration’s presidential transition activities can continue to be funded ahead of the 2024 election. And it requests an additional $436 million for the Office of Personnel Management as the HR agency prepares to launch the Postal Service Health Benefits Program this fall.
As we approach the end of 2025, a significant shift is on the horizon for federal employees and all taxpayers across the country. The Tax Cuts and Jobs Act, enacted in 2017, is set to expire at the end of next year.
This sunset will bring about the reversion of several tax provisions to their pre-TCJA state unless Congress takes action. For federal employees, understanding how these changes may impact your tax situation is crucial for effective financial planning.
A Brief Overview of the Tax Cuts & Jobs Act
The TCJA brought about sweeping changes to the U.S. tax code. Some of the most notable changes included:
Lower Individual Tax Rates: The TCJA reduced individual income tax rates across all brackets.
Increased Standard Deduction: The standard deduction nearly doubled, which simplified tax filings for many by reducing the need to itemize deductions.
Increased Child Tax Credit: The child tax credit was expanded, making it more generous for families.
State and Local Tax (SALT) Deduction Cap: The deduction for state and local taxes was capped at $10,000, impacting taxpayers in high-tax states.
Estate Tax Exemption: The estate tax exemption was doubled, allowing more wealth to be transferred without incurring estate taxes.
Reduced Corporate Tax Rate: The corporate tax rate was significantly reduced from 35% to 21%.
While many assume that the current tax law is the norm, the TCJA was only approved as a temporary solution and the changes were not made permanent. To prevent the expiration of the TJCA, Congress will need to approve an extension or a new plan altogether.
Since we all know how difficult it can be for Congress to present an agreed-upon plan, we need to prepare for the implications of a TCJA Sunset.
The Impact of the TCJA Sunsetting on Federal Employees
Federal employees, like all taxpayers, will be affected by the sunsetting of the TCJA. Here’s how the potential changes could impact your tax situation:
1. Reversion to Higher Tax Rates
One of the most immediate impacts of the TCJA’s expiration will be the return to higher individual tax rates. For example, a couple with joint income between $94k and $201k will see their tax rate increase from 22% to 25%. The next bracket up will increase from 24% to 28%.
What this means for federal employees: If your income remains steady, you could find yourself in a higher tax bracket, resulting in more of your earnings being subject to federal income tax. Even if your income drops in the future, you could be taxed at a higher rate than you are right now because of the changes in the tax brackets.
2. Reduction of the Standard Deduction
The standard deduction, which doubled under the TCJA, will return to its pre-2018 levels. For 2024, the standard deduction for single filers is $13,850 and $27,700 for married couples filing jointly. Post-sunset, these amounts could be nearly halved.
What this means for federal employees: A lower standard deduction means that less of your income will be shielded from taxes, potentially increasing your taxable income. If you’ve been taking the standard deduction, you might consider whether itemizing deductions could be more beneficial moving forward.
3. Changes to Itemized Deductions
Several itemized deductions that were limited or eliminated under the TCJA could return. For instance, the cap on the State and Local Tax (SALT) deduction could be lifted, allowing federal employees in high-tax states to deduct a larger portion of their state and local taxes.
What this means for federal employees: If you live in a state with high income or property taxes, the return of full SALT deductions could provide some relief, but only if you itemize your deductions.
4. Child Tax Credit and Family Benefits
The expanded child tax credit, which increased from $1,000 to $2,000 per child under the TCJA, will revert to its lower level. The eligibility for this credit will also become more restrictive.
What this means for federal employees: Families with children could see a reduction in their tax credits, leading to a higher overall tax liability.
5. Estate Tax Implications
The estate tax exemption, which doubled under the TCJA, is set to return to its pre-TCJA level. This change could significantly impact estate planning for federal employees with substantial assets.
What this means for federal employees: If you have a larger estate, more of it could be subject to estate taxes, which could affect the wealth you plan to pass on to your heirs.
The Political Landscape: What Could Happen Next?
As we move closer to the expiration of the TCJA, both political parties are proposing different approaches to tax policy, which could shape the future of taxation in the U.S.
Republican Proposals
Republicans generally favor extending or making permanent the tax cuts introduced by the TCJA. This includes:
Making the Individual Tax Cuts Permanent: Republicans aim to maintain the lower tax rates, the higher standard deduction, and the expanded child tax credit.
Further Reductions in Corporate Taxes: There is ongoing support for maintaining or even lowering the corporate tax rate further to encourage business investment and economic growth.
Estate Tax Elimination: Some Republicans advocate for the complete elimination of the estate tax, which they argue is a double tax on wealth.
If Republicans gain control of Congress or the presidency, these proposals could shape future tax policy. For federal employees, this could mean an extension of the current tax benefits and potentially even lower taxes.
Democratic Proposals
On the other side, Democrats generally advocate for rolling back some of the tax cuts introduced by the TCJA, especially for higher earners. Their proposals include:
Increasing Taxes on the Wealthy: Democrats propose higher tax rates for high-income earners and the restoration of the top marginal tax rate to 39.6%.
Expanding Tax Credits for Low- and Middle-Income Families: There is support for expanding the Earned Income Tax Credit (EITC) and child tax credit, targeting more relief to lower and middle-income families.
Corporate Tax Increases: Democrats propose raising the corporate tax rate, though not necessarily back to the pre-TCJA level, to fund social programs and reduce the deficit.
Tightening Estate Tax Provisions: Democrats may look to reduce the estate tax exemption or introduce new taxes on large inheritances to address wealth inequality.
If Democrats maintain or gain control of Congress and the presidency, federal employees might see higher taxes on income, especially for those in higher brackets, alongside expanded benefits for middle-income families.
What Should Federal Employees Do Now?
With the TCJA sunsetting and the uncertainty surrounding future tax policies, federal employees should take proactive steps to prepare:
Consider Tax-Efficient Investment Strategies: Explore tax-advantaged accounts, such as the ROTH Thrift Savings Plan (TSP) or ROTH IRAs, to help manage your tax liability. Roth contributions, which are taxed upfront but grow tax-free, might be especially valuable if tax rates rise.
Estate Planning: If you have a significant estate, now is the time to review your estate plan. Consider gifting strategies or trusts that could help minimize your estate tax liability under the anticipated lower exemption levels.
Consult a Financial Advisor: Given the potential changes, consulting with a financial advisor who understands the unique needs of federal employees can help you navigate these shifts and make informed decisions. When you’re making tax decisions, it’s important to consider your potential lifetime tax bill, not just what you’ll owe this year. A good Financial Advisor can create a plan that maps out your lifetime income and strategize ways to lower the tax burden for you and your loved ones.
The expiration of the TCJA at the end of 2025 marks a pivotal moment for tax policy in the United States. Federal employees should be aware of the potential changes and start planning now to mitigate any adverse effects on their financial situation. Whether the tax landscape shifts toward continued tax cuts or higher taxes, being prepared will allow you to make the most of your financial future and make the most of the opportunities available.
Austin Costello is a certified financial planner with Capital Financial Planners. If you don’t feel confident in your investment strategy or your ability to keep a level head and would like feedback, register for a complimentary check up. For topics covered in even greater depth, see our YouTube page.
The Department of Veterans Affairs’ ongoing effort to develop a streamlined platform for veterans to access education benefits has been hobbled by serious setbacks and cost overruns, according to a watchdog report released on Wednesday.
The Forever GI Bill, passed by Congress in 2017, offered enhanced education support for veterans and called for the Veterans Benefits Administration to modernize its information technology systems to better provide services.
VBA signed a $453 million contract with Accenture Federal Services in March 2021 to develop and implement a new Digital GI Bill platform to improve the processing of education-related claims and modernize related systems. The system was initially scheduled to be operational by April 2024.
In a highly critical review, however, VA’s Office of Inspector General found that “insufficient planning by VBA hindered development and completion of the Digital GI Bill platform and has led to significant delays and contributed to about $479 million in additional costs.”
OIG said the initial contract requirements for the platform’s development “were unclear and included unrealistic expectations,” which caused the total cost of the modernization initiative to more than double. VA now estimates that the platform will be completed around July 2026.
The watchdog said these issues began at the very start of the contract development process because “VBA failed to include staff who had the required technical expertise to develop performance work statements, which outline the necessary steps to complete the platform development and therefore drive contract requirements.” VA and Accenture ultimately renegotiated their contract in December 2023 to account for the program’s additional needs.
OIG also said that VBA “did not choose to follow the best practices” developed by the Government Accountability Office for developing “an integrated master schedule to guide a project.”
The watchdog provided three recommendations to VA, including calling for VBA to establish a process for monitoring implementation steps under the renegotiated contract, to develop a clear timeline for the program’s implementation and to enhance communication between Accenture and department officials.
Although VA concurred with OIG’s recommendations, the department said the additional costs associated with the renegotiated contract “were needed to correct the original contract and meet the objectives of the [Digital GI Bill] platform.”
The release of the report comes as Congress has grown increasingly frustrated by the program’s delays. Bipartisan members of the House Veterans’ Affairs Committee previously pressed VA officials during a July 2023 hearing about delays in the project’s implementation, with lawmakers expressing particular concern at the time about the fulfillment of contract requirements.
In an Aug. 28 letter to the VA, Rep. Mike Bost, R-Ill. — who chairs the House panel — said OIG’s report “shows that the Digital GI Bill project was predestined for cost overruns, delays and disappointing results from the outset.”
“The project has already cost taxpayers an extra $479 million, and this is hardly the end of the cost overruns,” he wrote. “On top of that, the system still has not met its original goals to make student veterans’ education benefits more user friendly. This is wholly unacceptable and student veterans — and taxpayers — deserve better.”
Bost requested that VA respond to his committee by Sept. 8 with additional information about its plans to address OIG’s recommendations and its disciplinary actions against officials who are responsible for the program’s setbacks.
President Joe Biden promised that tens of billions of dollars for the IRS in the 2022 Inflation Reduction Act would not be used to increase audits of individuals making $400,000 or less annually. But an IRS watchdog is questioning whether the tax agency will actually be able to fulfill that promise.
The Treasury Inspector General for Tax Administration reported on Aug. 26 that IRS has not developed a plan to comply with a 2022 directive from Treasury Secretary Janet Yellen that implements Biden’s long standing promise regarding IRA funding and the audit rate.
While the agency has selected tax year 2018 as the base year for comparing future audits conducted with IRA funding, it hasn’t finalized a methodology to calculate the audit rate for that year with respect to tax returns under $400,000. That is mainly because IRS is considering alternative methods to follow the 2022 directive.
For example, the agency at one point proposed an authority to waive audits from the calculation if a taxpayer seems to have purposefully understated income to avoid the $400,000 threshold. TIGTA warned that such a waiver could be abused.
“We were concerned that the proposed waiver authority would allow the IRS too much discretion to waive examinations that are under the $400,000 threshold, essentially permitting the IRS to say, ‘we’ll know what constitutes a waiver when we see it,’” investigators wrote.
According to the report, IRS dropped the idea and emphasized that any proposal shouldn’t be considered definitive until the methodology is finalized.
TIGTA said that IRS also should examine adjustments for cases when two spouses each earn less than $400,000 but together make more than that amount and craft a definition for small businesses, which the 2022 directive also exempts from the increased audit rate.
IRS officials told investigators that they are not treating the development of the methodology as an urgent matter because the directive applies to audits beginning with tax year 2023. However TIGTA said those returns will begin to be examined in fiscal 2025, which starts in October.
“The IRS was unable to provide TIGTA with a timetable or milestone dates to ensure that it is progressing toward completion,” investigators wrote. “The absence of timetables and milestones increases the risk that the methodology may not be developed in time to ensure compliance with the 2022 Treasury directive.”
Additionally, the inspector general predicted that conducting increased audits of those making more than $400,000 would challenge IRS because historically it has focused on taxpayers reporting less than that amount. Between fiscal 2019 and 2023, examinations of individuals under that threshold consistently accounted for more than 90 percent of total audits.
IRS agreed with a recommendation to accelerate discussions with the Treasury Department to finalize a methodology to ensure IRA funds are used in compliance with the 2022 directive. It set an implementation date of Dec. 31. The agency also agreed with a TIGTA recommendation to formally document discussions and meetings regarding the methodology’s development.
However the agency disagreed with a recommendation to use “return transaction file” data to determine the number of filers above and below the $400,000 threshold. Instead, it will use “statistics of income” data, which TIGTA criticized for being derived from a probability sample. IRS countered that TIGTA’s preferred option is a raw data source that is subject to inconsistent reporting and other data anomalies.
TIGTA also recommended that IRS ensure a field in its audit information management system includes a taxpayer’s reported income plus any unreported income identified during the audit in order to measure post-audit income. While IRS only partially agreed with the suggestion, the inspector general said that actions the agency plans to take in response to it are in the spirit of the recommendation.
The head of the U.S. Forest Service said last week that as the clock on the fiscal year winds down, the agency is preparing for the potential of harsh budget realities in fiscal 2025.
In an Aug. 29 blog post, Chief Randy Moore said that the Forest Service was planning its fiscal 2025 budget allocations under a scenario of “a potentially budget-limited future” after previous legislation provided additional funding and pay raises for its wildland firefighters.
“When we plan, we look at our current funding level and both the House and Senate Interior Appropriations Subcommittee funding proposals,” said Moore. “Prudent planning entails using the lowest of all those numbers so we neither over-plan nor negate Congress’ decision space.”
That means until an appropriations package clears Congress, the Forest Service will gauge its fiscal 2025 allocations estimates to the funding levels proposed by the House Interior Subcommittee, which was $8.43 billion as of the June 26 markup.
Those levels reflect a $53.5-million increase from the agency’s regular fiscal 2024 appropriation, and a 6.3% increase for wildland fire management, but an overall 3.5% cut from total enacted levels that included $945 million in supplement funding from the Infrastructure Investment and Jobs Act.
The Forest Service asked for $8.9 billion in funding in the president’s fiscal 2025 budget request in March.
Moore said that the targeted funding level, combined with expiring supplemental funding from the Inflation Reduction Act and the Bipartisan Infrastructure Law and two cost of living increases that amount to nearly 10%, means that the Forest Service is traversing some challenging budget headwinds.
“The current situation calls for us to make hard decisions. In the short term, we are leaning into workforce planning, as well as relying on our partners who we’ve substantially invested in, to stand shoulder-to-shoulder with us to continue to deliver our priority work,” he said. “This is leadership’s work for the foreseeable future. As this work progresses, we will share information as quickly as we can.”
In the near term, the Forest Service will prioritize funding the workforce, including “asking employees to be taking on the highest priority work that matches our funding sources.”
The funding warning follows years of financial challenges for the agency, including in trying to recruit and retain federal wildland firefighters.
The Biden administration sought to shore up wildland firefighters numbers in 2022 by authorizing pay raises of $20,000 per year or 50% of their base salary, whichever was lower, in the infrastructure law, and Congress extended those raises through at least fiscal 2024.
In July, Moore told the Forest Service’s National Leadership Council that lower job attrition meant that the agency would require tighter hiring controls.
The House passed its appropriations package on 210-205 on July 24. The Senate appropriations bill cleared committee on July 25 and awaits a floor vote.
Moore said the Forest Service would hold an all-employee call on Sept. 16 to answer any questions about the budget planning and other subjects.
SAN DIEGO — A federal judge on Tuesday dismissed the felony convictions of five retired military officers who had admitted to accepting bribes from a Malaysian contractor nicknamed “Fat Leonard” in one of the Navy’s biggest corruption cases.
The dismissals came at the request of the government — not the defense — citing prosecutorial errors.
Retired U.S. Navy officers Donald Hornbeck, Robert Gorsuch and Jose Luis Sanchez, and U.S. Marine Corps Col. Enrico DeGuzman had all admitted to accepting bribes from defense contractor Leonard Francis, nicknamed “Fat Leonard.”
The enigmatic figure — who was six feet, 3 inches tall and weighed 350 pounds at one time — is at the center of the Navy’s most extensive corruption cases in recent history.
The three pleaded guilty to a misdemeanor charge of disclosing information on Tuesday. The judge also dismissed the entire case against U.S. Navy officer Stephen Shedd. Their defense lawyers could not be immediately reached for comment.
It marked the latest setback to the government’s yearslong efforts in going after dozens of military officials tied to Francis, who pleaded guilty to offering more than $500,000 in cash bribes, along with other gifts and wild sex parties in Southeast Asia, to Navy officials, defense contractors and others. The scheme allowed him to bilk the maritime service out of at least $35 million by getting commanders to redirect ships to ports he controlled and overcharging for services, according to the prosecution.
Francis owned and operated Singapore-based Glenn Defense Marine Asia Ltd., which supplied food, water and fuel to U.S. Navy vessels. He was arrested in 2013 in a sting operation in San Diego.
Prosecutors said in legal filings outlining their request for Tuesday’s dismissals that the action does not mean the defendants did not commit the charged crimes but because information was withheld from the defense and other mistakes were made, they wanted to ensure justice was served fairly.
In 2022, Judge Janis Sammartino had ruled the former lead federal prosecutor committed “flagrant misconduct” by withholding information from defense lawyers. In September, the felony convictions of four former Navy officers were also vacated. The four men pleaded guilty to a misdemeanor and agreed to pay a $100 fine each.
The dismissals come weeks before Francis is due back in court to set a date for his sentencing.
Francis returned to the U.S. late last year after a daring escape from his house arrest in San Diego in 2022. He fled to South America weeks before he was scheduled to be sentenced last year, and was later captured in Venezuela, which extradited him to the U.S. as part of a prisoner exchange.
The escape was also seen by some as a misstep by the prosecution for allowing him to not be held behind bars.
Federal buildings are going long stretches of time, as long as a year in some cases, without routine maintenance or repairs due to poor performance by contractors who received $1 billion last fiscal year to maintain them, according to a government watchdog.
In a sample of the more than 340 operations and maintenance contracts awarded by the Public Buildings Service, the General Services Administration’s inspector general found nearly 70% of open work orders have not been filled, and of those that were, 43% took longer than they should have.
This risks federal buildings becoming “more vulnerable to excessive wear and tear,” leading to “higher repair and replacement costs” and potentially unsafe working conditions, according to the audit, which investigated GSA-owned buildings in Georgia, Maryland, Massachusetts, New York, Oregon and Texas.
At the Jacob Javits building in New York, for example, 44% of the schedule preventative maintenance had not been done on time. That building primarily houses the Department of Homeland Security, Social Security Administration, FBI and Court of International Trade.
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The federal government’s real estate situation has been thrust in the spotlight post pandemic. Higher rates of employees teleworking have made some office space obsolete, while other buildings have seen the shift as an opportunity to remodel or rethink space to be more flexible to accommodate the hybrid nature of work.
In a recent hearing before lawmakers, Jason Miller, a top official from the Office of Management and Budget, said agencies are about 80% compliant with orders to have their workforces onsite half of the time. And about 50% of all workers is not eligible to telework in the first place, he said. However, “extra” space that is either underutilized or outdated has become a complicated topic, as reducing, repurposing and repopulating federal offices all cost money and resources, which the audit shows are thin even just for existing work.
Officials interviewed in the report said at five of six sampled sites, there was not enough contract staff to meet the level of work, especially for larger buildings. There appears to be a discrepancy between personnel needs because staff at the actual place where maintenance will be done don’t get to weigh in on whether a contractor’s proposed staff levels is sufficient before an award is made.
Frequent turnover and lack of skills also contribute to hired staff being ill-equipped to meet the work, the report found.
In other instances of lapsed repairs or foregone maintenance, contractors and federal officials overseeing the work have different understandings of what a contract requires, and the Public Building Service, an office within GSA, has not enforced its own contract terms.
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“One contractor did not inspect any completed work orders even though its contract required quality control inspections to be submitted monthly,” according to the audit.
Inspection checks were sometimes marked as a “pass” even without the work having been done, and sometimes they didn’t occur at all, without any repercussions.
In another example cited in the report, the Edith Green-Wendell Wyatt building in Oregon had a backup water tank for fire sprinklers that had not been cleaned, as required, “in a long time.” Yet the contractor marked the inspection as “complete,” even though a subsequent visit revealed murky, green water so opaque a subcontractor couldn’t see through it when it sent a submersible down to look for cracks.
In its response to the audit, PBS said it would agree to enforce technical evaluations of bids pre-award and would issue clarifying guidance to ensure the expectations of a contract are adhered to.
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Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.
An 86-year-old federal procurement program designed to employ workers with disabilities underwent a major regulatory overhaul this month in an effort to make it more competitive on price.
The program’s overarching regulatory framework has been largely preserved since it was established in the 1930s, but calls to modernize the program have been voiced for years in order to grow it. As an answer, a new rule finalized in March allows price to be an evaluation factor in contract selection. Because of the program’s unique structure, price is something the program has been able to deemphasize in awards, unlike the rest of the $600 billion contracting sphere.
“The rule is designed to increase transparency, incentivize performance, and ensure that the program remains a trusted source of supply and services for federal agencies, thereby creating and maintaining jobs for people who are blind or have significant disabilities,” said AbilityOne Commission Chairperson Jeffrey Koses in a statement.
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Before the rule, a federal agency would bring a contract opportunity to central nonprofit agencies. Then, they would respond with their bids based on past performance and technical capabilities; price was not a factor at that point. Then the central nonprofits would designate a supplier, and the nonprofit and the government would negotiate a fair price that the AbilityOne Commission then confirms.
Now, for new and existing defense contracts over $50 million and civilian contracts over $10 million, competition inclusive of price can be requested. Competition can only be requested by a senior official or, in the services, a flag or general officer. And again, the commission has final authority.
“The rule is written in a way such that factors and subfactors, including technical capability, past performance, training, and placements, are part of the trade-offs that are weighed along with the proposed price,” a commission spokesman told Federal Times. “This was to ensure that the price does not have a disproportionate role in the overall competitive process.”
However, introducing price to the bid selection process is a huge departure from going procedure, nonprofits said in interviews with Federal Times.
“One of the benefits of this program is, once a contract is on the procurement list, you’re not recompeting,” said Dwight Davis, president of Global Connections to Employment. “You’re just repricing it every five years. There’s a whole difference when you’re talking about running a competition.”
Impasse-related competitions are limited to service requirements exceeding $1 million in total value, which the commission estimates would represent a fraction of all contracts.
And though some nonprofits raised concerns about the commission lacking the resources and funding to take on any potential surges in impasse requests, a spokesman for the commission said officials don’t expect the them to increase given agencies still have to exhaust all existing remedies before competition is considered.
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Further guidance is forthcoming on implementation of the final rule, the spokesman added, but nonprofit business owners said until they see the regulation fully baked, they are unsure how exactly price will be weighed.
The rule also acknowledges that the award process will consider nonprofits’ investments in training and development of their workforces, though the rule declined to adopt the term “social impact” in its language.
Though these efforts are incentivized in the competitive process, they’re still an unallowable cost.
“When you want people to succeed, you have to have the tools available for them to succeed,” said Jewelyn Cosgrove, vice president of government and public relations, at Melwood, another AbilityOne nonprofit. “But in a price-centric in a world where price has heavier weight, we are going to have to look really closely to ‘how?’ And how far do we go in terms of workforce development?”
Though Cosgrove and Davis said the final rule sought to be responsive to concerns raised by the nonprofit community, implementation guidance will be crucial to ensuring minimum disruption to the AbilityOne workforce, which includes more than 2,500 veterans.
“This is a program that is unique in the contracting space,” said Cosgrove. “And it is unique in the disability space. The next two, three years … is going to tell us far more than what we know today.”
Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.
