GSA's Technology Transformation Services Violated Hiring Rules and Overpaid Incentives

Why We Performed This Audit

We included this audit in our Fiscal Year 2024 Audit Plan as a result of risk areas identified during our audit planning. Our audit objective was to determine if the GSA Federal Acquisition Service’s (FAS’s) Technology Transformation Services (TTS) is complying with federal hiring authorities and appropriately classifying positions

What We Found

Merit-based hiring is the cornerstone of a fair and effective federal workforce. It ensures that all candidates have an equal opportunity to compete and are selected based on their qualifications. TTS deviated from merit system principles in its hiring and workforce management practices, resulting in noncompliance with federal hiring requirements and raising serious concerns about fairness and accountability.

Specifically, TTS failed to comply with federal hiring authorities by improperly using Direct-Hire Authority (DHA), which eliminated veterans’ preference and appeared to preselect future hires. TTS also failed to annually certify the U.S. Digital Corps (USDC) group recruitment incentive and misused recruitment strategies. Finally, the majority of TTS’s employees receive the highest available pay grade, and the TTS Talent team performs some of the GSA Office of Human Resources Management’s core functions. 

What We Recommend

We recommend that the FAS Commissioner: 

1. Evaluate TTS’s use of DHA to ensure it complies with 5 C.F.R. 337.205, Critical hiring needs.
2. Ensure TTS’s hiring procedures comply with GSA hiring requirements.
3. Strengthen controls to ensure that:
   1. TTS’s hiring actions provide open and fair competition among qualified applicants and adhere to merit system principles;
   2. TTS’s hiring actions are properly documented to allow for a complete and accurate third-party review, as required by the U.S. Office of Personnel Management;
   3. Recruitment incentives are considered in lieu of Superior Qualifications Appointments and are documented to verify compliance with 5 C.F.R. 531.212(d), Consideration of recruitment incentive; and
   4. The USDC group recruitment incentive is reviewed and approved annually, as required by GSA Order HRM 9575.1 CHGE 1, Recruitment, Relocation and Retention Incentives; and 5 C.F.R. 575.105(b)(3), Applicability to employees. Additionally, evaluate and document the need to award a group recruitment incentive that exceeds GSA’s recommended amount.
4. Evaluate the Superior Qualifications Appointments awarded to TTS employees beginning April 1, 2021, to determine if the pay step granted is properly supported. If errors exist, refer to GSA’s Office of General Counsel to determine the appropriate action.
5. Evaluate the TTS Talent team’s job series classifications to ensure they align with the team’s primary responsibilities and develop necessary controls to ensure future compliance.
6. Evaluate TTS’s pay distribution and develop the controls necessary to ensure there is equal pay for work of equal value and consistency throughout TTS and GSA in accordance with 5 U.S.C. 2301(b)(3), Merit system principles. 

The FAS Commissioner disagreed with the methodology underlying our findings and resulting recommendations. We stand by our methodology and reaffirm our findings and recommendations. Accordingly, we urge the FAS Commissioner to: (1) reconsider our findings and (2) develop corrective actions addressing our recommendations. 

GSA’s written comments are included in their entirety in Appendix B.