Conference planners play an important role in determining how much an event will cost. While few rules or regulations describe exactly how DOJ components must select and plan their conferences, the FTR provides suggestions to federal agencies planning conferences. According to the FTR, conference planners should work closely with sponsoring agency officials to recommend and select the best location, agenda, and dates for the conference. The FTR is primarily concerned with whether the government is receiving the best value for its event-coordinating dollar. To this end, the FTR states that conference planners should:
Minimize all conference costs, including administrative costs, conference costs, attendee travel costs, and conference attendee time costs;
Maximize the use of government-owned or government provided conference facilities as much as possible;
Identify opportunities to reduce costs in selecting a particular conference, location, and facility; and
Develop and establish internal policies to ensure that FTR standards are being met.
In January 2000, JMD updated DOJ’s conference planning rules to reflect the conference planning guidance suggested by the FTR.26
The FTR does not regulate how a sponsoring agency should select a conference planner. The FBI planned its three conferences internally, while OJP and COPS hired external event planners to work with and plan the seven conferences they sponsored. To review how the event planners were hired and the costs they charged, we selected and reviewed three large, national scope conferences identified in Table 5-1.27
OJP EXTERNAL EVENT PLANNING COSTS
| Number of
|OJJDP National Conference||605,619||1,831||43|
|NIJ Technology Conference||409,535||1,315||50|
|CCDO LEC Conference||145,767||1,329||24|
|Source: OIG analysis of external event planner financial records|
OJP hired event planners by either awarding a contract through its Acquisition Management Division (AMD) or through a cooperative agreement awarded by the individual OJP program office. For the OJJDP National Conference, OJP first contracted with and then awarded a cooperative agreement to an external event planning firm. To pay external event planning costs associated with the 2005 NIJ Technology Conference, OJP provided funds via a supplement to an already-existing cooperative agreement to a private, non-profit technology commercialization company. OJP awarded a different event planning firm a task order to plan and support two separate events, including the CCDO LEC Conference, under an existing contract the event planning firm had with the National Institutes of Health (NIH).
We met with officials from OJP who had hired external event planners and were told that contractors and awardees conduct much of the conference planning work, but sponsoring program officials are “constantly involved” with the external event planning process. In all cases, planning officials told us that they spent considerable time and effort working closely with those providing logistical support for these events.
According to OJP officials, program offices used cooperative agreements to hire event planners to provide both programmatic and logistical support for a conference.28 Event planners hired under both types of procurement vehicles supplied logistical services for each event, including to: (1) perform location visits and contract with a hotel and other subcontractors; (2) promote the conference and manage its registration process; and (3) manage all on-site activities during the conference.
Our review of the charges paid by OJP to plan each conference found that indirect charges incurred under the two cooperative agreements appear to comprise a much more significant portion of the total external event planning cost than the conference planned under a contract.29 The following sections describe how OJP hired these event planners and different types of direct and indirect costs they incurred.
OJJDP National Conference
In June 2003, OJP’s AMD awarded a blanket purchase agreement valued at $10 million to a company to provide broad administrative support and technical assistance to OJJDP and the Coordinating Council on Juvenile Justice and Delinquency Prevention (Coordinating Council).30 The wide-ranging support provided by the contractor as part of this agreement is referred to as the Juvenile Justice Resource Center (JJRC). In part, the JJRC contract tasks the event planner to provide logistical support to Coordinating Council and OJJDP events.31
In May 2005, OJP requested that the contractor begin planning the OJJDP National Conference under the JJRC contract. The work order detailed that the event planner was to perform both logistical and programmatic tasks to select the conference location, speakers, attendees, and calendar. Among other things, the contractor was directed to develop an exhibitor marketing plan and to work with OJJDP to set registration fees that would be charged to conference attendees.
In subsequent work orders, OJP also requested that the contractor select and hire subcontractors to provide technical assistance support for certain aspects of the conference. For example, the OJJDP event planner used the JJRC contract to secure a subcontractor to design the plenary session stage and supply the video, lighting, and computer equipment for the event. As shown in Table 5-2, our review of financial records showed that the JJRC contract charged $345,854 for planning the OJJDP event.
JJRC CONTRACT CONFERENCE COSTS
|Cost Category||Activity|| Amount
|External Event Planning||Direct Labor and Indirect Rates associated with 1,735 work hours.||107,910|
|Subcontractors||Technical assistance support for conference related activities.32||237,944|
|Source: OJJDP event planner budget records|
While planning the conference under the JJRC contract, however, the contractor applied for a new cooperative agreement from OJP to manage and coordinate “pre-conference, on-site, and post-conference support” activities for the OJJDP National Conference. An attachment to the submitted cooperative agreement entitled “FY05 Continuation Solicitation” listed collecting, processing, and tracking exhibitor and attendee fees among other conference support duties the event planner agreed to perform. The attachment added that the registration fees would be used to “offset expenses for meals and other conference expenses.”
On September 14, 2005, OJP awarded the contractor a cooperative agreement with an approved budget totaling $1,780,561 to continue planning the conference. OJJDP officials told us that OJP did not use a formal competitive announcement process to award this cooperative agreement because they wanted to continue using the same contractor who already provided conference “pre-planning” under the JJRC contract. 33 The approved budget for the cooperative agreement allocated $780,561 of DOJ funds and provided for an additional $1,000,000 in “program income,” which was to be generated by the event planner charging and collecting exhibitor and attendee registration fees.34
We examined the types of event planning costs incurred by the OJJDP event planner while performing duties under the cooperative agreement. Working with the event planner to capture and categorize conference costs, we found that the event planner charged a total $497,709 under the cooperative agreement for salaries, indirect costs based on overhead and general and administrative rates, and travel expenses for event planners to staff the conference as shown in Table 5-3.
OJJDP COOPERATIVE AGREEMENT
EVENT PLANNING COSTS
|Type of Cost||Amount ($)|
|Direct Labor (Salaries)||203,528|
|Overhead (82% of direct labor cost)||167,552|
|OJJDP Event Planner Employee Travel||5,730|
| General and Administrative
(13% of all costs totaling 937,206)
|Source: OJJDP event planner billing and accounting records|
Direct Labor and Travel Costs
For the direct labor charges, we analyzed time reports showing the employee name and the hours spent performing conference planning functions. According to the terms of the cooperative agreement, event coordinator employee pay was based on their position or role in planning the conference. For example, the agreement paid administrative support employees $18 per hour while the project coordinator received $58 per hour. Under the cooperative agreement, we found that 68 event planner employees worked a total of 7,648 hours and incurred $5,730 in travel costs.35
For cooperative agreement indirect costs, we found the event planner applied an overhead rate of about 82 percent to direct labor costs and a general administrative rate of nearly 13 percent to all costs. Both of these rates were based on the results of an accounting report on the event planner’s adjusted cost schedule performed during June 2005 and approved by OJP in October 2005. Applied to the $203,528 direct labor charge, the 82-percent overhead rate totaled $167,552. According to event planner officials, since overhead rates are based on costs associated with providing the direct labor, the overhead rate can only be charged against direct labor costs.
The OJJDP event planner also applied a general and administrative flat-rate charge of almost 13 percent, or $120,899, to all program costs as shown in Table 5-4.
OJJDP COOPERATIVE AGREEMENT
GENERAL AND ADMINISTRATIVE COSTS
|Cost Category|| Direct and
| General &
Rate Charge ($)
|External Event Planning *||376,810||48,608|
|Food and Beverages||291,940||37,660|
|Signs and Door Items||2,407||311|
|Source: OJJDP event planner conference cost reports.
* Costs captured in these categories include only expenses incurred and charged by the OJJDP
event planner under the cooperative agreement and not the JJRC contract.
We asked OJP and OJJDP officials why they awarded the contractor a cooperative agreement when it was already performing conference planning duties under the 2003 JJRC contract (discussed further in Chapter 8). OJP officials stated that a Government Accountability Office (GAO) decision issued in March 2005 disallowed federal agencies or their contractors from charging or using conference registration fees without specific authorization from Congress.37 Without being able to charge registration fees, OJP officials told us that OJJDP would not be able to host the event.
OJP officials also told us that canceling the OJJDP National Conference in light of the GAO decision was not an option because the date was set and agreed to by the Coordinating Council. Since the conference still required the financial support provided by registration fees and contractors could not collect registration fees, OJP decided to award the event planner a cooperative agreement. By performing event planning duties under a cooperative agreement, the event planner technically ceased to be a contractor and OJP officials told us they could then collect registration fees as program income.
Since OJP paid external event planning costs under both the JJRC contract and a cooperative agreement, we added the amount charged and hours worked under both procurement instruments to determine the total event planning costs for the OJJDP National Conference. As shown by Table 5-5, the OJJDP event planner spent 9,383 work hours to provide external event planning services for the event.
Table 5 -5
TOTAL OJJDP EVENT PLANNER
DIRECT LABOR HOURS AND COSTS
|Source: OJJDP event planner billing and accounting records|
Since the OJJDP event planner used the $505,657 in registration fees to offset conference costs, we found that the cooperative agreement award had a remaining balance of $225,117. We spoke to OJJDP event planning officials and they indicated that there were no further logistical support duties planned for the OJJDP National Conference. Therefore, we recommend that OJP deobligate the remaining balance of $225,117, thereby allowing these funds to be put to a better use.38
NIJ Technology Conference
In July 2004, the Department of Homeland Security’s (DHS) Directorate of Science and Technology entered into an arrangement with NIJ to collaborate and coordinate demonstrating, evaluating, and testing certain technologies related to law enforcement and counterterrorism. The collaboration recognized that since NIJ and DHS have similar missions to support research and technology development for national public safety interests, both organizations should work together to give technology assistance to state and local public safety agencies.
The NIJ Technology Conference provided a forum for state and local emergency responders to meet and discuss their technological needs with federal, private, and academic technology developers. To plan this conference, NIJ hired a not-for-profit technology commercialization company (NIJ event planner) to provide overall program management by awarding a $550,000 supplement to an existing cooperative agreement.39 In addition, NIJ received $150,024 from DHS, which it used to pay a portion of event planning costs for the Technology Conference.40
Although the cooperative agreement was not awarded until September 2005, the Statement of Work detailed the agreement’s period of performance from January to December 2005. The NIJ event planner told us that conference planning activities began in April 2005. We asked why the event planner began work on the agreement before it was actually awarded. Officials with the NIJ event planner told us that several months of dedicated effort were required to: (1) secure an appropriate venue that could accommodate the conference’s attendees, (2) notify and select vendors who would exhibit technology at the event, and (3) choose and secure speakers.
The cooperative agreement charged the NIJ event planner with providing both logistical and programmatic support for the conference. We examined the types of event planning costs incurred by the NIJ event planner and charged to the NIJ cooperative agreement. We found that the non-profit planner billed a total $409,535 for salaries, indirect costs based on overhead and general and administrative rates, and travel expenses for event planners to staff the conference as shown in Table 5-6.
NIJ TECHNOLOGY CONFERENCE NON-PROFIT
EVENT PLANNER COSTS
|Type of Cost||Amount ($)|
|Salaries (3,525 hours)||126,077|
|Overhead (131% of direct labor cost)||164,669|
|NIJ Event Planner Travel||14,074|
| General and Administrative
(15% of all costs totaling $716,735)
|Source: NIJ event planner billing and accounting records|
Direct Labor and Travel Costs
For the direct labor charges, we analyzed individual employee time sheets showing the employee name and the hours spent working on Technology Conference duties. According to terms of the cooperative agreement, employee pay was based on their position or role in planning the conference. For example, the agreement paid administrative staff about $17 per hour while the project manager received $54 per hour. We found that event planner employees worked a total of 3,525 hours on cooperative agreement activities and incurred $14,074 in travel costs.
For cooperative agreement indirect costs, we found that the NIJ event planner applied an overhead rate of almost 131 percent to direct labor costs and a general and administrative rate of nearly 15 percent to all costs. Both the overhead rate and the general and administrative rate were set by a March 2005 review performed by the non-profit planner’s cognizant federal agency, the Department of Defense. Applied to the $126,077 direct labor charge, the 131 percent overhead rate totaled $164,669. According to event planner officials, since overhead rates are based on costs associated with providing the direct labor, the overhead rate was only charged to direct labor costs.
The NIJ event planner also applied a general and administrative flat-rate charge of almost 15 percent, or $104,715, to all program costs, which under the cooperative agreement totaled $716,735, as noted in Table 5-7.
NIJ COOPERATIVE AGREEMENT
GENERAL AND ADMINISTRATIVE CHARGES
|Cost Category|| Direct and
| General &
|External Event Planning||304,820||44,534|
|Food and Beverages||175,101||25,582|
|Signs and Door Items||0||0|
|Source: NIJ event planner financial records.|
With $304,820 charged for external event planning activities and $104,715 for general and administrative costs, the NIJ event planner spent a total of $409,535 to provide external event planning services for the NIJ Technology Conference.
NIJ event planner records show that the Technology Conference cost a total of $821,450. Since the NIJ event planner applied the collected $411,914 in registration fees as revenue to offset the total conference cost, the NIJ event planner used $409,536 of the awarded $550,000 to pay for the conference. Officials at the event planning agency told us that the residual $140,464 was reprogrammed for them to fund “pre-planning” tasks for NIJ’s 2006 Technology Conference in Atlanta, Georgia.
CCDO LEC Conference
OJP’s AMD issued a request for quote for a contractor to support two separate CCDO events. The first event, called the Strategy Development Training Conference, was set for March 2006, while the second event, the LEC Conference, was to be held in August 2006. In July 2005, the LEC event planner submitted a quote and was subsequently awarded a $1 million task order by OJP under the event planner’s government-wide contract with the Department of Health and Human Services, National Institutes of Health (NIH), Office of Procurement Management.42
The NIH contract was in the form of a government-wide 5-year indefinite-delivery agreement with an estimated value of $80 million. Under its terms, the LEC event planner would perform logistical event planning work described in task orders that would be individually competed and priced by either NIH or another requesting federal agency. The NIH contract also established firm-fixed, hourly rates that included labor and associated overhead costs, while all other expenses would be “passed-through” and billed on an actual cost basis. The contract permitted the event planner to assess a pre-defined handling charge based on a percentage of pass-through costs, as established in a task order bid. All non-NIH task orders would be assessed a fee of 1 percent that would be applied to the total event planning cost.
Since the OJP task order used to hire the CCDO event planner encompassed two different CCDO events, we met with event planning officials to determine how best to identify only LEC conference-related costs. LEC event planning officials told us that the labor charges incurred through April 2006 primarily involved planning, hosting, and closing out the Strategy Development Training Conference, which they told us occurred sometime in March 2006. Consequently, we considered the labor rates that were billed beginning in May 2006 related to the LEC conference since the Strategy Development Training Conference was completed by that time.
Using May 2006 as the starting period for LEC conference costs, we found that the LEC event planner charged a total of $145,767 under the task order for labor rates, travel costs, and other associated fees, as shown in Table 5-8.
SUMMARY OF LEC EVENT PLANNER COSTS
|Type of Cost||Amount ($)|
|Labor Charges (1,464 hours)||121,691|
|Travel and other related costs||4,355|
|Fixed Fee (3% handling charge applied to costs totaling $458,246)||13,748|
|NIH Fee (1% of all costs totaling $597,327)||5,973|
|Source: Event planner invoices and accounting records|
We analyzed time reports showing employee names and the hours charged to perform conference planning activities. According to terms of the contract, the event planner was paid for work based on fixed labor rates, not actual payroll costs. We found that 19 LEC event planner employees charged a total of 1,464 hours, at a cost of $121,691. The event planning company also incurred $4,355 in travel and other related costs.
As shown in Table 5-9, the event planner applied a 3 percent handling fee totaling $13,748 to all non-labor actual costs charged to the task order. Since the task order was under the comprehensive NIH contract, NIH assessed a fee of $5,973, or 1 percent of all task order costs, including the handling charge, totaling $597,327.
CHARGES AND FEES APPLIED TO
LEC CONFERENCE COSTS
|Cost Category|| Direct
|External Event Planning||126,046||105|
|Food and Beverages||181,002||5,430|
|Signs and Door Items||0||0|
|TOTAL DIRECT AND HANDLING COSTS||597,327|
|NIH Fee (1% of subtotal)||5,973|
|Source: LEC event planner invoices.|
Our review of the three large, national-scope conferences found that OJP hired external event planners by issuing contracts or awarding cooperative agreements from its appropriated grant funds. Contracting officers at AMD issued contracts, while cooperative agreements were issued and managed by individual program offices within OJP. In the case of the OJJDP National Conference, OJP hired its external event planner first through a contract and subsequently through a cooperative agreement.
All three of the event planners reviewed provided logistical and administrative support to help OJP program offices prepare for their respective conferences. These services included performing location visits and site selection analysis, establishing contracts with venues or hotels for meeting space and attendee rooms at per diem rates, and preparing budgets and reports for review by OJP officials. These activities directly relate to FTR and DOJ rules requiring that conference planners try to obtain the best value for the government.
However, although the conferences were similar in scope and size – all 3 events had multi-day programs and over 1,300 registrants – the number of hours billed by the event planners ranged from over 9,000 hours to under 1,500 hours, as shown in Table 5-10.
EXTERNAL EVENT PLANNING COSTS
OF SELECTED CONFERENCES
| Name of
|OJJDP National Conference||JJRC Contract and Cooperative Agreement||605,619||9,383||43|
|NIJ Technology Conference||Cooperative Agreement||409,535||3,525||50|
|CCDO LEC Conference||Contract||145,767||1,464||24|
|Source: OIG analysis of event planner performance and financial records|
Event planners told us they provided different levels of logistical support for each of the conferences. For example, the OJJDP event planners told us they worked closely with OJJDP officials and other members of the Coordinating Council to develop and evaluate conference workshop themes and select speakers at these functions. Similarly, the NIJ event planner told us it worked with NIJ, DHS, and DoD officials to identify the attendee and exhibitor audience and put together significant off-site incident response tours.
While the above may help explain differences in the amount of hours billed by the individual event planners, it does not speak to the level of indirect rates charged to plan each of the conferences. As a general rule, indirect rates are determined by a company’s overhead and equipment costs, facility fees, debt payments, and administrative expenses. This means that companies performing technical or scientific services may have high indirect cost rates to pay for the tools necessary to conduct these activities. Under cooperative agreements, the OJJDP and NIJ event planners applied overhead rates of 82 and 131 percent, respectively, on all direct labor charges. In addition, both event planners charged a general and administrative rate ranging from 13 to 15 percent to all conference planning expenses. Meanwhile, the LEC event planning company, whose business almost solely focuses on providing conference and meeting support, charged a flat hourly rate. This event planner then applied a 3 percent fixed fee to all non-labor conference planning charges.
Since OJP program offices award event planning cooperative agreements and the AMD awards event planning contracts, no one office within OJP assesses all event planning expenses. As a sponsor of many large, national-scope conferences each year, we believe that OJP should evaluate how it solicits, hires, and assesses event planners. As exhibited by the wide-range of hours and indirect rates charged by these three event planners, we believe that such oversight is necessary to ensure that event planning costs comply with FTR and DOJ conference planning guidelines.
We recommend that OJP:
Deobligate the $225,117 remaining balance of cooperative agreement number 2005-MX-KX-K001.
Evaluate methods to solicit, hire, and assess external event planners to ensure that conference planning costs comply with FTR and DOJ conference planning guidelines.
For the purposes of this review, programmatic support means a service designed to achieve the OJP conference’s mission or objective, while logistical or administrative support includes activities required to plan and host a large-scale, national conference separate from the conference’s specific mission or objective.
Indirect costs are incurred charges that cannot be readily identified with a particular direct or final cost, such as those relating to facility use and depreciation, debt interest, capital improvements, equipment costs, maintenance, and administration.
Established by the Juvenile Justice and Delinquency Prevention Act, the Coordinating Council is an independent body within the executive branch of the federal government to coordinate federal juvenile delinquency prevention programs and activities. The Coordinating Council is chaired by the Attorney General, while the OJJDP Administrator serves as vice-chair.
We note that the company selected by the JJRC contract specializes in more than just event planning activities. We found that the contractor also provides OJP and other DOJ components information technology services, program consulting, curriculum development, and law enforcement research support.
JJRC contract work orders numbered 3-70, 3-75, and 3A-15 requisitioned a subcontractor to provide technical assistance support such as audio, lighting, staging, and video services for the conference’s five plenary sessions and its “Town Hall” meeting. We do not consider these services “external event planning costs” since these services are technical support and not performed by the external event planner.
42 U.S.C. §5665 (2005), which gives the OJJDP Administrator the authority to make grants and contracts with private agencies and organizations to carry out projects for the development, testing, and demonstration of promising initiatives and programs to prevent, control, or reduce juvenile delinquency.
According to Office of Management and Budget Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, program income is income directly generated by a supported activity or earned as a result of the award.
The total does not apply the $505,657 collected as registration fees since the OJJDP event planner did not use this revenue to offset conference costs before calculating its general and administrative rate charges. The OJJDP event planner told us the money collected as registration fees was used to offset certain types of conference costs, such as the entire cost of food and beverages.
Besides planning the Technology Conference, the officials with the company selected by NIJ told us they also provide services related to technology research and policy development, marketing and industry consultation, and security and management planning.
In November 2005, a similar agreement between NIJ, DHS, and the Department of Defense (DoD), Office of the Assistant Secretary of Defense for Homeland Security was established. According to the conference’s final report prepared by the non-profit planner, DoD provided an additional $50,000 to the event planner to provide specified conference-related tasks. The final report states that these funds were used to pay for certain on-site personnel expenses and the cost of transporting attendees to off-site programs and tours.
The total does not apply the $411,914 collected as registration fees since the non-profit planner did not use the revenue to offset conference costs before calculating its general and administrative rate charges.