United States Marshals Service's Use of Independent Contractors as Guards
Audit Report 05-24
Office of the Inspector General
The United States Marshals Service (USMS) assumes custody of individuals arrested by federal agencies and is responsible for housing and transporting prisoners from the time they are brought into federal custody until they are either acquitted or sentenced. On any given day, the USMS has in its custody roughly 47,000 detainees housed in federal, state, local, and private jails throughout the nation.
The USMS is granted authority under 28 U.S.C. Section 565 to employ the use of personal services contract guards1 to assist USMS deputy marshals in day-to-day operations throughout its 94 districts.2 The USMS's primary sources for procuring personal services contract guards are 1) guard company vendors and 2) independent contractors. Since the Office of the Inspector General (OIG) has reviewed the USMS's use of guard company vendors in prior audits (as discussed in the background section of the report), we selected as the focus of this audit the USMS's use of independent contractors for guard services.
The objectives of this audit were to: 1) assess the USMS's internal controls over the procurement of independent contractors for guard service, 2) determine whether the USMS is adequately monitoring the performance of its independent contract guards, 3) determine whether the independent contractors are meeting the USMS's experience and fitness-for-duty requirements, 4) evaluate the initial training provided to contract personnel, and 5) determine whether independent contractors are performing only authorized duties.
The audit encompassed the USMS's management of personal services contract guards during fiscal years (FYs) 2003 and 2004. Our primary focus was on management of contract guards by USMS district offices and the Justice Prisoner and Alien Transportation System (JPATS).3 In conducting the audit we:
I. Summary of Audit Findings
Our audit of the USMS's use of independent contractors as guards disclosed the following deficiencies:
Under 28 U.S.C., Section 565, the USMS director is authorized to use appropriated funds "to make payments for expenses incurred pursuant to personal services contracts and cooperative agreements… for security guards… in lieu of services by United States marshals and deputy marshals."
Prisoner Management, Section 9.31 established policies and procedures for USMS districts and the JPATS governing procurement of independent contractors as security guards. To ensure that USMS procurement practices are compliant with the FAR, the USMS incorporated into its policy, the FAR requirements for procurement of personal services contracts, in particular, the need for a competitive bidding process in awarding contracts.
According to USMS policy, independent contractors may be used to: 1) guard and process federal prisoners in the cellblock, courtroom, and during transport; 2) guard and transport federal prisoners to and from medical appointments; and 3) guard federal, seized, or forfeited property (including entry control, roving patrol, fixed posts, and emergency response). During the course of this review, we found that the USMS uses independent contractors primarily to transport federal prisoners to and from court facilities, and guard federal prisoners in courtrooms or cellblocks.
III. Management of Independent Contractors
Independent contractors, as the term implies, require a separate contract for each individual contractor. In FY 2003, for example, the USMS district offices employed a total of 2,786 independent contractors, each of whom required a separate contract. By contrast, use of guard company vendors may provide for hundreds of guards under a single contract. Under the USMS's Court Security Officer Program, for instance, the USMS utilizes 12 separate contracts with regional guard companies to obtain the services of 4,500 contract guards to provide security at about 400 federal court facilities nationwide.
Our review of 223 individual contracts with independent contractors in six districts and the JPATS operations hub revealed material deviations from the USMS policy and the FAR, including the absence of a competitive bidding process, arbitrary wage determination, unauthorized contract payments, and contracting officers exceeding procurement authority. The problems stem largely from a general disregard in the districts for USMS policy governing procurement practices for personal services contracts. Instead of a proper procurement process, what we found in the field was a process that more closely resembles the recruitment of employees than the hiring of independent contractors. Further, the overall lack of a formal procurement process for hiring independent contractors as guards has created an environment conducive to inconsistencies, inefficiencies, and misuse of authority.
Full and Open Competition
We found that the USMS sites reviewed failed to provide for full and open competition in the awarding of personal services contracts to independent contractors. For example, the USMS sites reviewed did not maintain bidders' lists, in accordance with USMS policy. Further, there was no formal solicitation of sealed bids from potential contractors, nor was there any other systematic approach to procure contract guards based on a competitive process, as required by USMS policy and the FAR.
Of the 57 independent contractors that we interviewed or who provided questionnaires, 42 contractors (74 percent) indicated that they learned about the guard position through informal contacts with colleagues or acquaintances in law enforcement. At least four others were actively recruited by the USMS. In no instances did we observe the use of a bidders list or any formal solicitation of independent contractors for guard services pursuant to a full and open competitive bidding process. To the contrary, what we observed were procurement practices that encouraged the development of a closed system that restricts the pool of applicants to those individuals who, through some personal contact, learn of contract guard positions. USMS officials cited sole source justification in circumventing the full and open competition requirements of the FAR.
We found that wage rates for independent contractors are set by the districts with approval from USMS headquarters, rather than through a competitive bidding process, as required by USMS policy directives. We observed that the discretion afforded the districts resulted in broad variances in hourly wage rates from district to district, ranging from a low of $12 in the Central District of California, which includes the Los Angeles metropolitan area, to a high of $35 for select guards within the District of Columbia Superior Court.
We could not attribute wage variances to cost-of-living factors because wages in some metropolitan areas, such as Los Angeles, with an hourly wage rate of $12, were lower than that of more rural areas such as the Southern District of Texas and the Southern District of Iowa, which had hourly wage rates of approximately $18. Rather, the variances stem from the fact that some districts established wage rates for independent contract security guards commensurate with wages for active duty sworn law enforcement officers, while others, such as JPATS, established wage rates commensurate with that of bailiffs and jailers, which is more in line with the duties required of the contract.
Such variances would not exist under contracts with guard company vendors, where wages are established by the vendor, and are based upon the Department of Labor's (DOL's) prevailing wage rate determinations for the applicable service industry occupation, in accordance with the McNamara-O'Hara Service Contract Act of 1965.5 The current DOL prevailing wage rate for bailiffs and jailers averages about $16.25 nationwide.
We determined that the high wages were offered, in part, to attract active duty sworn police officers to serve as contract guards, as was the case in the Western District of Washington, which offered an hourly rate of $25 hour. The problem we found with this strategy was that while the districts may succeed in recruiting some active duty police officers, in most instances the districts are forced to rely on generally less-qualified contract guards - usually retirees - because the active duty police officers are not always available when needed for work.
Thus, in some districts the USMS is paying too much for independent contractors by setting wages for a labor pool of which it cannot take full advantage. On average, USMS independent contractors were paid at an hourly rate of $19.62 for guard services in FY 2003, $3.37 greater than the average prevailing wage rate of $16.25, based on the DOL's prevailing wage rates for bailiffs and jailers. Based on 611,638 total contract guard hours reported in FY 2003, we estimate that the USMS paid approximately $2 million in excess of the prevailing wage rate for comparable services in that year alone. This does not necessarily mean that such cost savings could be achieved, but it does reflect a basic flaw in the districts' wage-setting methodology.
The contracts for most of the independent contractors reviewed were not to exceed $25,000 and procurement authority delegated to contracting officers at the sites reviewed was generally for the same amount. USMS policy directive 9.31 D.8.e states, "should the contract per guard exceed the district's procurement authority the action must be ratified by the Procurement Office. The districts and the JPATS shall properly justify the need to exceed the contract amount." This language is derived from the FAR, which states that "Contracting officers may bind the Government only to the extent of the authority delegated to them."
We found that in 3 of the 7 sites reviewed, USMS contracting officers allowed contractors to receive payments that exceeded the contract amount by $221,586 without written justification, or approval from USMS headquarters, as follows:
Our review of payroll totals for all of the 2,786 independent contractors employed in FY 2003 indicated that a total of 97 guards were paid in excess of their contract amounts by a total of $887,756. As of the third quarter of FY 2004, 26 guards had received unauthorized payments totaling $135,532.
USMS policy, as reflected in the Statement of Work for independent contractors, specifically delineates those services authorized under the contract (see Appendices III and IV). To determine whether contractors were providing only authorized services, we interviewed district officials, reviewed timesheets and obtained information directly from independent contractors. We noted the following problems:
Use of Independent Contractors
At the heart of the issue underlying the problems we encountered with the USMS's use of independent contractors is the question of whether the USMS can realistically be expected to adhere to the rules regarding their procurement. Deviations from USMS policy and the sections of the FAR upon which it is based were commonplace and fostered an environment conducive to inconsistencies, inefficiencies, and unauthorized uses of independent contractors. However, requiring districts to provide full and open competition in accordance with USMS policy (e.g., formal solicitations, bidders' lists, sealed bids) on 2,000 plus individual contracts annually, in our judgment, would be an administrative burden that would negate the benefits derived from the use of the independent contractors. Indeed, even with the current "streamlined" procurement practices, districts with large numbers of independent contractors commented on the administrative workload required in managing so many individual contracts. The fact that the districts have almost universally ignored the requirements of USMS policy governing the procurement of independent contractors, in our judgment, constitutes a tacit rejection of the policy, and indicates that full implementation of the policy is not practicable.
Thus, the dilemma facing the USMS: To allow the districts to continue with their current procurement practices, which are expedient but fundamentally flawed and susceptible to abuse, or to fully implement the procedures required to bring the districts into compliance with USMS policy and the FAR and in so doing create an unmanageable administrative burden.
Since neither of the above options is an acceptable solution, we recommend the USMS consider seeking alternative approaches to acquiring the necessary guard services that would eliminate the need for independent contractors. Specifically, we recommend that the USMS consider 1) expanding the use of company vendor contracts, 2) expanded use of intergovernmental agreements with local jails or cooperative agreements with local law enforcement agencies, and 3) explore as an alternative the use of part-time and temporary employees.
Vendor Contracts (Company Guards)
The USMS could expand, to some extent, its use of guard company vendors. Currently, the USMS uses contract vendors primarily to provide courtroom security via the CSO Program and for guarding inmates receiving outside medical care. Our review determined that USMS districts rarely use vendor guards for court-related prisoner handling activities, preferring instead to use independent contractors.
Current USMS policy requires that districts obtain guard services to the extent possible from existing IGAs with local jails. Toward that end, the districts could negotiate agreements with local law enforcement or corrections agencies to provide guard services and prisoner transportation. One of the districts surveyed had indicated an interest in pursuing the use of a cooperative agreement with the local police department in lieu of using independent contractors. Expanded use of these agreements could alleviate the districts' reliance on independent contractors for transporting prisoners to and from federal courthouses and medical facilities.
Part-time and Temporary Employees
In 1978, the U.S. Congress established the Federal Employees Part-time Career Employment Act (Act) to promote the expansion of part-time employment. Congress concluded that part-time employment benefits the government by offering management more flexibility in meeting work requirements and filling shortages in various occupations.
We noted in our review of USMS payroll reports that over 90 percent of the independent contractors used in FY 2003 worked fewer than six months during the year. On average, independent contractors worked about 200 hours over the course of the year. Despite the fact that these independent contractors represent, for the most part, a workforce of temporary, part-time workers, there is no indication that the USMS has ever pursued a part-time program or explored the use of part-time or temporary employees for guard services. We believe that the implementation of such a program may be a feasible alternative to the use of independent contractors that would meet the USMS's flexibility requirements because of fluctuations in courtroom activity.
IV. Internal Controls
There are inherent risks associated with transporting and guarding federal prisoners outside of a jail or detention center. To minimize these risks the USMS has established policies and procedures to ensure that independent contractors hired for guard service possess the skills and experience necessary to perform their duties. However, our review of over 200 contract guard case files revealed internal control weaknesses in the hiring and monitoring of independent contractors. We determined that at least 12 individuals with little or no law enforcement experience were hired as guards and performed guard duties. Further, we were unable to establish for a significant number of guards whether they were qualified for guard service due to a lack of USMS documentation. For example, we were unable to verify that guards had been fully trained, had met fitness standards, and had received a required background investigation due to a lack of documentation. In general, the problems noted resulted from the lack of a systemized approach to hiring and monitoring contracts by the contracting officers and COTRs. Failure to address these weaknesses may allow poorly qualified, ill-trained individuals to obtain guard contracts, which in turn could jeopardize the safety of individuals involved in the judicial process.
Individuals hired as independent contract guards are classified under one of five qualifying experience categories: 1) active duty sworn state or local law enforcement officers; 2) reserve sworn state or local law enforcement officers; 3) former/retired sworn federal, state, or local law enforcement officers; 4) former/retired military police; or 5) private security/correctional officers. Properly classifying a contractor's qualifying experience is important because it determines the requirements needed by a contract guard to meet USMS employment standards. Category 1 and 2 guards, for instance, need only affirm that they meet specific USMS standards, e.g., firearms qualified, physically fit, sufficiently experienced in law enforcement, while category 3, 4, and 5 guards must provide medical fitness certification signed by a doctor; and be firearms qualified by the USMS.
We were unable to determine or verify qualifying experience for a significant number of independent contractor guards because the USMS files lacked sufficient documentation. The USM-234 Personal Qualifications Statement, for instance, the main document used to determine a contractor's qualifications, was missing from 51 case files, or 23 percent of the 223 case files we examined. Lack of documentation was generally concentrated in two of the sites we reviewed. In one district, 21 case files, or 84 percent of the 25 case files reviewed, lacked the necessary documents for determining the contractors' qualifications. The USM-234 was not on file for any of the 30 independent contractors reviewed in another district. Case files were missing for 10 of the 30 contractors, and the remaining 20 case files reviewed did not contain the USM-234.
For those files reviewed that did contain sufficient documentation, we determined that at least 12 of the guards hired lacked the experience required to qualify as contract guards. Four of those individuals had no prior law enforcement experience at all, but rather held positions as a sales clerk, a receptionist, a retired USMS employee who had worked as an administrative clerk, and an airport screener. While two of the four guards were no longer employed as contract guards, the former receptionist and airport screener were still active at the time of our review. USMS officials commented that while these individuals may not have had the proper law enforcement experience at the time they were hired, they now have qualifying experience through their guard service with the USMS. However, we believe that the hiring of unqualified individuals for prisoner handling operations represents a breakdown in internal controls that places an undue risk on all parties involved in the judicial process.
We reviewed 132 active case files to verify that independent contractor guards were medically certified as fit for duty. Our tests revealed a range of results. On the positive end of the spectrum was one district and the JPATS operation, whose case files were fully documented. At the other end of the spectrum were the three districts in which the case files were poorly documented. Somewhere in between were two districts, in which most but not all case files reviewed were adequately documented.
While not cited as an overriding concern, the physical fitness of retirees in the guard service was cited as an issue by USMS employees in the districts we reviewed and with the 14 judges that we interviewed. While the judges were generally satisfied with the performance of the independent contractors, one of the judges who responded by questionnaire did express concern stating, "The contract guards are usually older (some retired) or have worked a previous shift(s) for their regular employer. Due to a combination of these factors, contract guards are more likely to fall asleep during court proceedings."
It should be noted that while deputy marshals are medically certified by an agency physician, independent contractors are allowed to have their own private physicians sign their certification forms. As such, some skepticism is required as to the validity of those certifications. For example, we determined that at least three independent contractors had retired from their respective police agencies on medical disability. In addition, the contracts for at least four guards in one district were terminated because they did not meet fitness-for-duty standards. All were category 1 guards, i.e., active duty sworn law enforcement officers, who had been affirmed as fit-for-duty by their police agency. A guard with a physical disability or deteriorating health may not be able to respond adequately in an emergency, which could jeopardize the safety of all parties involved in the judicial process.
Training for Independent Contractors
USMS policy requires that independent contractors receive specific training within the first 30 days of service and annual refresher training thereafter. For example, the USMS requires independent contractors to review USMS policy on the use of force and view videos on bloodborne/airborne pathogens, prisoner restraints, and prisoner transportation. In the majority of case files reviewed, we were unable to verify that contractors had been provided with the required training. We reviewed a sample of 223 current and former independent contractors to determine whether they were provided the required training. We found documentation of training in one of the six districts we reviewed was virtually nonexistent, while documentation in three other districts were only marginally better.
In addition to general training, we assessed whether contractors had met the USMS firearms qualifications requirements. Not all contractors are armed guards. In fact, the USMS Statement of Work for independent contractors states that they shall be unarmed unless otherwise directed (see Appendix IV). For those contractors that the USMS designates as armed guards, USMS firearms policy requires that the guards qualify with firearms at least once every six months (see Appendix V).
Of the 132 active contractors selected for review, we determined that 77 contractors, or 58 percent, were required to be armed while 41 contractors, or 31 percent, were unarmed. We could not determine for the remaining 14 independent contractors, or 11 percent, whether they were required to carry and qualify with firearms because either their files or their Weapons Qualification Forms (USM-333) were not available. With the exception of five armed contractors who did not qualify with their firearms, we concluded that armed contractors at the sites reviewed received firearms qualifications. However, there was no indication of any corrective action taken to ensure that the five armed contractors qualified with their firearms. In addition, the required training for 23 of the 77 armed contractors, or 30 percent, was not provided in a timely manner, i.e., every six months, as required by USMS firearms policy. Independent contractors in four of the six districts we reviewed had gone a year or longer without re-qualifying with their firearms.
Background investigations on applicants serve an important purpose in mitigating the risk of hiring unqualified individuals for guard duty. Our review of active case files at the sites selected indicated that district offices are not in compliance with USMS policy concerning background investigations for independent contractors. We could not verify that a "limited background investigation" had been conducted in 86 case files, or 65 percent of the 132 active case files reviewed.
In general, the internal controls weaknesses discussed in this report in large part are attributable to poor contract monitoring on the part of USMS contracting officers and their respective COTRs.6 This is not to say that contracting officers and their COTRs were not monitoring the contractors themselves. Indeed, our interviews with contracting officers and their COTRs indicated that they were personally aware of contractors' individual performances in the completion of their assigned duties. However, all of the sites visited lacked a reliable system to record and maintain contract documentation related to hiring, training, and evaluating independent contractors. A comprehensive system of rosters and databases would provide the USMS with an effective means to collect and track information related to contract activity.
Toward that end, we noted that at least three of the six districts we reviewed had implemented signed rosters to document training completed and videos viewed by independent contractors. In addition, the JPATS operation had recently implemented a database for monitoring training provided to its independent contractors. The JPATS database includes contractors' orientation, firearms qualifications, ethics training, fit-for-duty requirements, JPATS-specific training, annual refresher training, and affirmation of work qualifications forms. In our judgment, the steps taken in the aforementioned districts and JPATS to document and track guard training represent a best practice that USMS management should use in developing a system to implement in all districts.
We also noted that one district had implemented the use of written evaluations of its independent contractors. In addition, the administrative officer in another district informed us that the district was developing an evaluation form for its independent contractors. We highlight the use of a formal evaluation process as another best practice that the USMS should implement in all districts.
V. OIG Recommendations
Our report contains 7 recommendations, including that the USMS: