Special Counsel vindicates GSA whistleblower on use of Acquisition Services Fund

The Office of Special Counsel sided this week with former Federal Acquisition Service Commissioner Tom Sharpe, calling on the General Services Administration to address Sharpe’s whistleblower claims of “gross mismanagement” and “gross waste of funds.”

In a July 5 letter to President Donald Trump, acting Special Counsel at OSC Adam Miles said GSA needs to provide more details on improved management controls because the administration’s decision to realign the Technology Transformation Service (TTS), “does not address Mr. Sharpe’s broader, substantiated concerns about mismanagement, and his related questions about whether the taxpayers are receiving a solid benefit from this program.”

“OSC urges GSA to follow Mr. Sharpe’s and the OIG’s recommendations, and go beyond the proposed restructuring to mandate stringent financial controls on the use of the [Acquisition Services Fund] to prevent future losses,” OSC said in its letter.

Sharpe’s complaint focused on how TTS was using the ASF’s revolving funds to pay for TTS activities, specifically 18F.

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“As GSA’s report confirms, TTS has accumulated significant losses, due to the absence of profit-generating products and an excess of highly paid employees,” OSC said in its letter. “These substantial losses demonstrate that proper financial controls have not been exercised. While GSA states that the realignment ‘is intended to address the funding and management control issues,’ it has not provided any clear details for improving management in response to the initial findings.”

The letter focused on Sharpe’s complaint, not the retaliation by former Administrator Denise Turner Roth. Federal News Radio first reported on the whistleblower retaliation in late June.

Sources say Sharpe believed Roth retaliated against him by taking away control of the fund, which traditionally has been controlled by the FAS commissioner.

“In comments to GSA’s report, Mr. Sharpe questioned whether the realignment of TTS under FAS, without the implementation of additional financial controls, would remedy the faulty projections and other gross mismanagement concerns that resulted in net losses of tens of millions of dollars, in violation of the Economy Act, the Modernization Act, and the Memoranda of Understanding governing TTS expenditures,” OSC said.

GSA’s Office of Inspector General determined Roth “retaliated against the complainant [Sharpe] by making statements and taking actions that threatened the complainant with transfer to another position.”

Roth defended herself in an earlier email to Federal News Radio, saying while she respected the process, the IG’s findings were “wrong and disappointing.”

“As with my entire, unblemished, 23-year career in government, all actions I took were necessary and driven to modernize the federal government,” said Roth, who now is a senior advisor at WSP USA, a global engineering and professional services organization.

Federal employment attorney John Mahoney said in an email to Federal News Radio that OSC’s letter could open the door for the president to discipline those involved in the mismanagement of funds.

“If the complainant suffered any prohibited personal practices [PPP] in retaliation for his whistleblower disclosures, he may be able to file an OSC PPP complaint, which has no deadline, and seek corrective and disciplinary action against GSA, including the reversal of those PPPs with back pay, benefits, interest, a clean record, as well as proven compensatory damages, and an award of reasonable attorneys’ fees,” Mahoney said.

The use of ASF has been a source of debate over the last several years.

In GSA’s fiscal 2016 financial report, it said the ASF had a “profit” of $8 million on $9.3 billion in revenue. GSA says the ASF has more than $2.1 billion in reserves.

GSA used $70,000 from ASF in 2014 to set up the 18F organization and planned to spend $30 million from the fund through 2016. 18F, which is a fee-based organization, is not expected to pay back the $30 million “loan” to the ASF until 2019, according to a Government Accountability Office report from June 2016.

More recently, sources said FAS also wants to use the fund to help pay for the costs of agencies transitioning to the new telecommunications contract called Enterprise Infrastructure Solutions (EIS) from Networx.