Training Procurement: Weaknesses Identified in NTSB Procurement Practices
(Letter Report, 07/26/94, GAO/OSI-94-20).
GAO investigated the National Transportation Safety Board's (NTSB)
procurement of leadership and management courses taught by the firm of
Miller & Friends. In fiscal years 1990 through 1993, NTSB employees
attended at least 18 courses provided by Miller & Friends at a total
cost of $167,000, exclusive of travel and per diem expenses. NTSB kept
incomplete records on the training courses obtained from Miller &
Friends. Available records indicate that NTSB did not seek competition
for the Miller & Friends training courses and did not provide any
justification for not seeking competition. Available records also show
that the total billing for one of the training courses was split between
several purchase orders. Further, NTSB officials did not investigate
questions about Mr. Miller's qualifications. Although some NTSB
employees objected to attending courses and to the training techniques
used by Miller & Friends, other described the courses positively. In one
instance, Mr. Timothy Forte, the Director of Aviation Safety, failed to
properly report reimbursement that he had received for travel expenses
from an NTSB vendor.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: OSI-94-20
TITLE: Training Procurement: Weaknesses Identified in NTSB
Procurement Practices
DATE: 07/26/94
SUBJECT: Ethical conduct
Irregular procurement practices
Human resources training
Sole source procurement
Questionable payments
Financial disclosure reporting
Procurement records
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Cover
================================================================ COVER
Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce, House of Representatives
July 1994
TRAINING PROCUREMENT - WEAKNESSES
IDENTIFIED IN NTSB PROCUREMENT
PRACTICES
GAO/OSI-94-20
NTSB Training Procurement
(600304)
Abbreviations
=============================================================== ABBREV
EEO - Equal Employment Opportunity
EEOC - Equal Employment Opportunity Commission
NTSB - National Transportation Safety Board
Letter
=============================================================== LETTER
B-257253
July 26, 1994
The Honorable John D. Dingell
Chairman, Subcommittee on Oversight
and Investigations
Committee on Energy and Commerce
House of Representatives
Dear Mr. Chairman:
This report responds to your letter of April 1, 1993, in which you
asked us to investigate the National Transportation Safety Board's
(NTSB) procurement of training courses provided by the firm of Miller
& Friends. You asked that we investigate allegations that NTSB (1)
kept incomplete records of training procurements, (2) circumvented
procurement regulations by splitting a contract into individual
purchase orders, (3) improperly procured training courses from Mr.
John Miller by paying the same instructor through different names and
accounts, (4) accepted the misrepresentation of an instructor's
qualifications, and (5) allowed instructors to use abusive training
techniques in classes that NTSB employees were required to attend.
BACKGROUND
------------------------------------------------------------ Letter :1
The NTSB is an independent agency that promotes transportation safety
by conducting independent accident investigations and preparing
safety recommendations. The NTSB's 1993 appropriation was $36
million, which included a $760,000 training budget for its
approximately 350 employees.
In March 1990, NTSB underwent a major reorganization, hiring a new
Managing Director and several senior-level directors. Among those
hired was Mr. Timothy Forte, the Director of Aviation Safety.
Within 6 months following the reorganization, Mr. Forte began
sending groups of employees to a series of leadership and management
courses given by Miller & Friends. These courses were conducted at
the request of the NTSB and for the benefit of NTSB employees.
In fiscal years 1990 through 1993, NTSB employees attended at least
18 courses provided by Miller & Friends, at a cost to the agency of
$167,185, exclusive of travel and per diem expenses. Typically,
about 20 NTSB employees attended each course, at a cost of at least
$410 per employee. The total paid to Miller & Friends for each
course was typically about $6,000-$14,000 and was always in excess of
$2,500.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
The NTSB maintained incomplete records regarding the training courses
obtained from Miller & Friends. The records that were maintained
indicated that the NTSB did not seek competition for the Miller &
Friends training courses nor did it provide any justification for
awarding those contracts without competition. The available records
also indicated that the total billing for one of the training courses
was split between several purchase orders. Further, NTSB officials
did not pursue questions concerning Mr. Miller's qualifications.
While some NTSB employees objected to attending courses and to the
training techniques used in the Miller & Friends courses, others
described the courses in positive terms. Finally, in one instance,
Mr. Forte failed to properly report reimbursement that he had
received for travel expenses from an NTSB vendor.
NTSB RECORDS REGARDING THE
MILLER & FRIENDS TRAINING
COURSES WERE INCOMPLETE
------------------------------------------------------------ Letter :3
We reviewed the NTSB records maintained by NTSB's accounting,
training, and program offices regarding the Miller & Friends courses.
For many of the courses, the files failed to establish (1) who
negotiated the price, (2) what services or materials were to be
delivered, and (3) what the basis was for obtaining the courses
without competition.
NTSB FAILED TO OBTAIN
COMPETITION FOR THE TRAINING
COURSES
------------------------------------------------------------ Letter :4
During fiscal years 1990 through 1993, NTSB employees attended at
least
18 courses provided by Miller & Friends, at a cost to the agency of
$167,185. NTSB officials requested the courses, which were attended
only by NTSB employees.
As a general rule, agencies are required to obtain competition when
acquiring property or services. With respect to procurements in
excess of $2,500, but less than $25,000, federal procurement
regulations require agencies to seek a reasonable number of bids or
quotations from qualified competitors before selecting a vendor,
unless an appropriate justification for selecting a single vendor
without competition is documented. NTSB Order 4400.1\1
requires that NTSB acquisitions for property or services be
consistent with federal procurement laws and regulations and provides
that requests for procurement of goods or services be submitted on
NTSB Form 4400.1, titled "Requisition for Supplies Services and
Shipments."
However, NTSB officials usually did not submit a Form 4400.1 in
seeking authorization and payment for the Miller & Friends courses.
Rather, NTSB officials authorized payment for the Miller & Friends
courses by issuing multiple Office of Personnel Management Standard
Forms 182 (SF-182).\2
At some point, the NTSB Comptroller\3 became aware of the use of
SF-182s to obtain training courses from Miller & Friends. In a
February 3, 1993, memorandum, the Comptroller advised NTSB officials
that
"It has come to my attention that training provided by Miller &
Friends has been acquired through the issuance of SF-182 forms
and not NTSB Form 4400.1. After researching this, it has been
concluded that we have reached a dollar threshold for FY 1993
wherein no further training may be obtained with Miller &
Friends. Effective immediately, you are instructed not to
commit funds/staff to Miller & Friends. Also, you are reminded
to submit an NTSB Form 4400.1 for any training required by
Non-Government facilities (except for colleges or
universities)."
The available documents, along with inquiries made during our
investigation, established that Mr. Timothy Forte, the Director of
Aviation Safety, suggested that Miller & Friends courses be selected.
Mr. Forte stated that he wanted his employees to attend Miller &
Friends courses because he was personally familiar with Mr. Miller's
abilities. Mr. Forte explained that he had attended the Federal
Aviation Administration's Executive School and other courses taught
by Mr. Miller and regarded those courses very highly.
Mr. Forte's prior experience with Miller & Friends courses, by
itself, does not constitute a valid basis for awarding contracts to
that firm without competition. NTSB officials provided us with no
other justification for Miller & Friends' sole-source selection.
--------------------
\1 NTSB Order 4400.1 was dated September 23, 1969, and has not been
updated since NTSB became an independent agency in 1974. The agency
is in the process of revising the order.
\2 SF-182s are normally used to authorize individual government
employees' attendance at nongovernment-sponsored training courses.
Form 4400.1 was used on three occasions.
\3 NTSB's Comptroller also functions as the Contracting Officer,
Director of the Financial Management Division, and Equal Employment
Opportunity Director.
ALLEGED SPLITTING OF BILLING
------------------------------------------------------------ Letter :5
We received allegations that NTSB officials tried to conceal the
total cost of the Miller & Friends courses by making payments using
different account numbers, different program codes, and variations of
Miller & Friends' name. Our review of NTSB's accounting records
showed that NTSB made payments to Miller & Friends using seven
different vendor numbers, eight different program codes, and four
variations of Miller & Friends' name.
The records indicated that on one occasion multiple purchase orders
to separate vendors were related to the same course. Specifically,
with regard to a 3-day Team Building course conducted in February
1993, we found one $8,000 purchase order to Miller & Friends for the
training course; one $3,000 purchase order to Mr. Miller's wife, Ms.
Athena Kaye, for implementing a precourse self-assessment; and one
$2,489 purchase order to Mr. Richard Brungraber for a 1-day
"follow-up" session.\4 NTSB's Comptroller acknowledged that Ms.
Kaye's administration of the questionnaire was part of the 3-day
course and should not have been billed separately.
--------------------
\4 According to the justification statement in the requisition, Mr.
Brungraber taught the 3-day Team Building course and was needed for
the follow-up session. Mr. Brungraber was listed in a corporate
brochure as a "management training associate" of Miller & Friends.
NTSB OFFICIALS DID NOT PURSUE
QUESTIONS REGARDING INSTRUCTOR
CREDENTIALS
------------------------------------------------------------ Letter :6
NTSB employees alleged that Mr. Miller had misrepresented his
qualifications as an instructor and that NTSB officials ignored
reports of such misrepresentations. Mr. Forte stated that he was
aware of questions regarding Mr. Miller's credentials but did not
pursue them because NTSB had no requirement to verify an instructor's
credentials for this type of training.
We reviewed a Miller & Friends corporate brochure obtained from an
NTSB file. The brochure stated that Mr. Miller "worked at the
University of California Medical Center at Davis as a clinical
instructor" and that he was completing his doctorate in clinical
psychology from the International College in Sacramento, California.
We attempted to verify the accuracy of these representations.
Officials at the University of California Medical Center at Davis
advised that no record exists for John Miller as a clinical
instructor. We were unable to locate any listing for a school by the
name of International College in Sacramento. The Association of
Adult Learning and Educational Credentials has no record of an
accreditation for International College in California; nor was it
listed in Peterson's Guide to Four-Year Colleges, 1992.
ATTENDANCE AT COURSES WHERE
ABUSIVE TRAINING TECHNIQUES
ALLEGEDLY WERE USED
------------------------------------------------------------ Letter :7
Several NTSB employees who had attended Miller & Friends courses
stated that they had been required to attend the courses and that the
courses subjected them to psychotherapy, harassment, and techniques
offensive to their religious beliefs.\5 Various participants,
however, held widely divergent perceptions about the training. The
following discusses the information we found regarding these issues.
--------------------
\5 Equal Employment Opportunity Commission (EEOC) guidance to its
investigators indicates that employers are required to reasonably
accommodate employees whose sincerely held religious beliefs conflict
with a particular training technique or method used in a "new age"
training program. EEOC Compliance Manual 628, App. B.
ALLEGED MANDATORY TRAINING
---------------------------------------------------------- Letter :7.1
Mr. Forte told us that the courses were not mandatory but rather
"available to all." He added that it was his "goal to have everyone
in NTSB attend Miller's training classes and see [the] effect on the
office." Our investigation revealed the following examples of
evidence that appear inconsistent with Mr. Forte's assertion that
the courses were not mandatory.
-- Several student evaluations stated that attendance was required
or mandatory.
-- An NTSB supervisor wrote on a student evaluation of the course
that
". . . course attendance was mandated by headquarters."
Another supervisor wrote, "I was required to send an employee.
. . ."
-- Two students filed EEO complaints with NTSB's EEO Director
because the courses allegedly violated their religious beliefs
and subjected them to harassment or psychotherapy without their
consent. The complaints resulted in a handwritten note from the
Management Director to the NTSB Chairman of the Board stating,
in part, "Future Miller training should
be . . . 100% voluntary."
ALLEGED ABUSIVE TRAINING
TECHNIQUES
---------------------------------------------------------- Letter :7.2
We received allegations that the Miller & Friends instructors were
using "abusive" tactics, including assertions that Mr. Miller was
"practicing group therapy," using harassment techniques similar to
those used to indoctrinate military recruits. Some NTSB employees
who attended these courses stated that Mr. Miller practiced group
therapy without a license and "violated ethical standards" by
"probing for personal information in a public forum" without prior
consent. The NTSB employees also complained that they were not
advised of the course's content before being required to attend.
We interviewed a number of students who had attended the courses.
Most expressed strong opinions regarding the training techniques
used. Those who favored the training described it as an "enriching
experience" that taught them how to deal with reality and to "improve
their self-awareness." Those who opposed the training described it as
"abusive," "brainwashing," and "bizarre." Some of the students we
interviewed stated that, on occasion, Mr. Miller would solicit
personal information from individual students and then used that
information in a way that caused emotional distress for the student
from whom the information had been obtained.
For example, Mr. Miller told a student whose father was dying of
cancer, "You are the cancer that is spreading through this group; you
are the cancer that is infecting everyone around you." The student
told us she was "deeply hurt" by his remarks and subsequently broke
down and cried. Upon contacting her supervisor to request permission
to leave the class, she was told that "He [Mr. Miller] tried to rip
me apart too, but this is the type of class you have to go through."
Later that day, when she returned to the office, she said that Mr.
Forte also told her to return to the class. At the end of the
course, the student wrote in her course evaluation "Participation was
not allowed. Instructor taught by intimidation, humiliation, and had
no course objective."
Mr. Forte told us that in at least one instance, Mr. Miller called
a participant a "slime bucket." He told us, however, that this remark
had to be put in context, because it was part of the "frank feedback"
given during these classes.
SENIOR OFFICIAL FAILED TO
DISCLOSE ACCEPTANCE OF TRAVEL
REIMBURSEMENT
------------------------------------------------------------ Letter :8
Mr. Forte told us that he accepted "about $300" in travel
reimbursement from Arola Enterprises, an NTSB vendor, to facilitate
his participation in teaching a non-NTSB course. Although NTSB
regulations did not prohibit Mr. Forte's action,\6 the Ethics in
Government Act, 5 U.S.C. App. 6 102(a)(B) (1988), required that
he disclose this reimbursement on his Public Financial Disclosure
Report, Standard Form 278. Mr. Forte's Standard Form 278 for the
years 1990 through 1993 did not disclose his receipt of travel
expenses.
--------------------
\6 NTSB's regulations permit "bona fide" reimbursements for
nonofficial travel. 49 C.F.R. 805.735-5(g) (1992).
METHODOLOGY
------------------------------------------------------------ Letter :9
We conducted our investigation from April 1993 to February 1994. Our
investigation focused on NTSB's procurement of the Miller courses.
We reviewed applicable law and regulations, directives, internal NTSB
correspondence, and documents.
We interviewed NTSB officials, including the Director for
Administration, the Comptroller, the Budget Officer, the Deputy
Ethics Officer, and the Director for Aviation Safety. We also
interviewed selected employees who attended the Miller & Friends
courses and various administrative staff who were responsible for the
procurement. In addition, we made an attempt to talk with Mr.
Miller, but he declined to grant us an interview.
We attempted to independently verify the accuracy of the cost data by
examining source documents, such as requisitions, invoices, and
vouchers. We consolidated the Miller courses by requesting that NTSB
provide us with a complete report of all its training expenditures
from its automated Consolidated Accounting System, beginning in
fiscal year 1990. Then we isolated all the payments made to Miller &
Friends or others with the same address as Miller & Friends or Mr.
Miller.
---------------------------------------------------------- Letter :9.1
We plan no further distribution of this report at this time. If you
have questions concerning this report, please contact me or Assistant
Director Houston Fuller of my staff at (202) 512-6722.
Sincerely,
Richard C. Stiener
Director
*** End of document. ***