CIA Watchdog Finds Abuses in Use of Independent Contractors

Source: Project on Government Oversight, May 2, 2016

The Central Intelligence Agency (CIA) broke the law in its use of independent contractors, according to a four-year-old internal review that was declassified and approved for public release in March. The contents of the June 2012 CIA Inspector General (IG) audit report were revealed last week by VICE News reporter Jason Leopold. … The IG found that “a significant number” of independent contractors were being utilized in a manner that made them appear to be government employees, a big no-no under CIA and federal regulation. Additionally, the CIA acquired their services under labor-hour contracts. The IG noted that this type of contract is “least preferred,” because it provides no incentive for cost control and furthers the perception of an employer-employee relationship. …Lastly, the IG determined the CIA was not adequately documenting the reasonableness of the prices paid for independent contractors’ services. As a result, the CIA could be paying independent contractors—many of whom are former CIA employees—more for their services than it should.

Related:

The CIA Illegally Let the Wrong People Do Intelligence Work, Declassified Report Finds
Jason Leopold, Vice News, April 27, 2016

The CIA violated federal laws and its own internal regulations by hiring independent contractors for a wide variety of intelligence and national security-related work that was supposed to be performed by government employees, according to a CIA Office of Inspector General (OIG) audit report obtained by VICE News in response to a Freedom of Information Act lawsuit. The report said the CIA “relies heavily on independent contractors to accomplish important facets of its mission,” particularly at the National Clandestine Service, the covert arm of the agency responsible for clandestine operations around the world. The report, dated June 22, 2012 but only declassified last month, raised numerous red flags about the CIA’s use of independent contractors throughout all divisions within the agency, and for work performed work in areas that included covert operations and protective security services overseas. By law, that work must be done by CIA employees. … The use of independent contractors by US intelligence agencies exploded after 9/11. At the CIA, the number of contractors working for the agency at one point surpassed the number of actual agency employees. … The OIG report singled out two of the offices within the CIA for using independent contractors to perform tasks that should have been carried out by federal employees — the National Clandestine Service and the CIA’s Human Resources/Recruitment Center. The report said the latter entered into contracts with a redacted number of independent contractors “in part, to conduct phone and in-person interviews of applicants for employment within the [National Clandestine Service’s] Professional Trainee (PT) and Clandestine Service Trainee (CST) Program, which is not in compliance with applicable federal laws” or the CIA’s own internal regulations. Federal law explicitly prohibits “the use of contractors for ‘the selection or non-selection of individuals for federal government employment, including the interviewing of individuals for employment.'”

Civilian Intelligence Community: Additional Actions Needed to Improve Reporting on and Planning for the Use of Contract Personnel
Source: U.S. Government Accountability Office, GAO-14-692T, June 18, 2014

From the summary:
Limitations in the intelligence community’s (IC) inventory of contract personnel hinder the ability to determine the extent to which the eight civilian IC elements—the Central Intelligence Agency (CIA), Office of the Director of National Intelligence (ODNI), and six components within the Departments of Energy, Homeland Security, Justice, State, and the Treasury—use these personnel. The IC Chief Human Capital Officer (CHCO) conducts an annual inventory of core contract personnel that includes information on the number and costs of these personnel. However, GAO identified a number of limitations in the inventory that collectively limit the comparability, accuracy, and consistency of the information reported by the civilian IC elements as a whole. For example, changes to the definition of core contract personnel limit the comparability of the information over time. In addition, the civilian IC elements used various methods to calculate the number of contract personnel and did not maintain documentation to validate the number of personnel reported for 37 percent of the records GAO reviewed. GAO also found that the civilian IC elements either under- or over-reported the amount of contract obligations by more than 10 percent for approximately one-fifth of the records GAO reviewed. Further, IC CHCO did not fully disclose the effects of such limitations when reporting contract personnel and cost information to Congress, which limits its transparency and usefulness.

The civilian IC elements used core contract personnel to perform a range of functions, such as information technology and program management, and reported in the core contract personnel inventory on the reasons for using these personnel. However, limitations in the information on the number and cost of core contract personnel preclude the information on contractor functions from being used to determine the number of personnel and their costs associated with each function. Further, civilian IC elements reported in the inventory a number of reasons for using core contract personnel, such as the need for unique expertise, but GAO found that 40 percent of the contract records reviewed did not contain evidence to support the reasons reported.

Collectively, CIA, ODNI, and the departments responsible for developing policies to address risks related to contractors for the other six civilian IC elements have made limited progress in developing those policies, and the civilian IC elements have generally not developed strategic workforce plans that address contractor use. Only the Departments of Homeland Security and State have issued policies that generally address all of the Office of Federal Procurement Policy’s requirements related to contracting for services that could affect the government’s decision-making authority. In addition, IC CHCO requires the elements to conduct strategic workforce planning but does not require the elements to determine the appropriate mix of government and contract personnel. Further, the inventory does not provide insight into the functions performed by contractors, in particular those that could inappropriately influence the government’s control over its decisions. Without complete and accurate information in the inventory on the extent to which contractors are performing specific functions, the elements may be missing an opportunity to leverage the inventory as a tool for conducting strategic workforce planning and for prioritizing contracts that may require increased management attention and oversight.