CDC memo about issues related to its Celerant dealings

Published on: 12/02/06

This three-page risk management analysis memo, obtained by The Atlanta Journal-Constitution, was written by Centers for Disease Control and Prevention employee Martin Landry to assess issues related to the agency's contract dealings with Celerant.

The document was developed after the newspaper filed a federal Freedom of Information Act request with the CDC seeking public disclosures of documents about the deal. The agency has not released any of those documents.

CDC officials on Friday sought to discredit this memo as "an internal document that was not using the facts, but conjecture..."

READ THE MEMO

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Email

Memo to CDC staff from senior agency official

By ALISON YOUNG
The Atlanta Journal-Constitution

Published on: 12/02/06

The Centers for Disease Control and Prevention, in anticipation of The Atlanta Journal-Constitution's article about irregularities in how $10 million in consulting business was awarded to a contractor, sent this email to all staff Friday evening. The email was written by Donna Garland, chief of CDC's Office of Enterprise Communications, a special arm of the agency director's office that specializes in risk communications.


——-Original Message——-

From: OD Announcements (CDC)

To: CDC All - CDC & ATSDR and non-CDC & non-ATSDR

Sent: Fri Dec 01 18:02:21 2006

Subject: Improved Business Services in the Procurement and Grants Office in the News

The Centers for Disease Control and Prevention (CDC) is in the news daily and overwhelmingly the coverage is about our excellent public health work or the accomplishments of members of our workforce. Occasionally it is a criticism, legitimate or not, about our activities and programs. You have consistently expressed to me and my team in the Office of Enterprise Communication (OEC) your desire to have a "heads up" if I expect the media will be running an article critical of the agency. That is not always possible; however, I told you that when I could, I would. Today, I am.

I cannot predict the timing or with absolute certainty if the story will even occur. But I will tell you what I know. A reporter for the Atlanta Journal Constitution is interested in writing about our efforts to improve business services in CDC's Procurement and Grants Office (PGO), which two years ago raised questions about the contract mechanism used. In OEC's preparation for responding to the expected request, an internal document that was not using the facts, but conjecture, was created to consider potential angles of questioning that the reporter might use. It represented one person's guess. That document was shared outside of CDC. Sadly, it may lead to additional media speculation and false conclusions.

Following is a brief summary of CDC's recent improvements in PGO that are the target of the news questions:

CDC needed an external contractor to assess and improve PGO's efficiency and service so we elected to hire an external contractor with this expertise. We identified a resource and learned we could move quickly to obtain their services through an interagency agreement with the National Institutes of Health (NIH) because it had already had a competitive bid that reached this business. Allegations were made that this was not the right way to obtain this contract, and the Department of Health and Human Services (HHS) was asked to review the process. The recommendation was made by HHS to renegotiate the contract but to do so at CDC. This was done, and the contract ended some time ago. So far, based on the improvements recommended by the contractor, PGO has saved approximately 4.9 million dollars, the time to get contracts and other actions completed has been shortened, the traditional attrition rate at PGO has declined, and hundreds of satisfied customers have expressed their appreciation.

Here are the facts in greater detail:

* Beginning in 2003, CDC measured some aspects of performance in PGO and found that improvement was needed.

* CDC did not have the in-house expertise to assess how to improve the complex system of processes that affect our ability to efficiently and effectively complete some of PGO's work. We decided to find an outside contractor with a proven track record of success in business process improvements.

* We sought input from a business management expert who had been working with CDC for some time. CDC used an interagency agreement to access an existing government-wide contract to secure services of a specific consulting firm based on this expert input. Allegations were made that this expert had a conflict of interest with the selected contractor that could have influenced his recommendation. The contracting company and the business expert have gone on the record to state that at no time, then or now has there been an affiliation between the two.

* The firm was selected for the following reasons: it had a proven track record for reengineering complex operations and had innovative approaches to this type of work; it involved customers in the process; it used quantitative measures of performance; and it was a recognized leader in the field.

* In April 2004, an anonymous letter was sent to HHS making allegations about the contracting practices used to obtain the contract for improving business services for PGO.

* As soon as the contents of the letter were known to CDC, CDC's Chief Operating Officer sent the HHS Assistant Secretary for Administration and Management a memorandum requesting that his office review the allegations.

* HHS conducted a thorough review and was initially concerned about the appropriateness of the contracting mechanism via the interagency agreement. In July 2004, HHS requested contract work be stopped to allow them time to review the entire process.

* In September 2004, HHS endorsed the effort to reinstate the contract but required CDC take over as the contracting authority and renegotiate its terms. As a result, PGO assumed responsibility for the contract and renegotiated it for a cost savings of $500,000. The contract also modified the period of performance to cover a 3-month period from February 1, 2004 to May 11, 2004, to recognize the actual period of performance and to rectify the period of contractually unauthorized performance.

* The final outcome following the review was that the work continued with the original contractor, CDC became directly responsible for managing the contract, and through the renegotiation CDC reduced its costs by $500,000, from $10 million to $9.5 million.

* As a result of the efforts of the contractor and the many people through PGO and across CDC who were involved in the reengineering effort, the following has occurred in the last two years:

* Combining 2005-2006, PGO has $4.9 million in cost avoidance (savings) as a result of improved performance.

* For nine types of business transactions, PGO has reduced by 34% the cycle time (time it takes from transaction initiation to award of a contract or grant).

* At the same time, PGO has increased the number of grants and contract actions by 26% with fewer PGO staff supporting this work.

* Since July 2005, PGO has received more than 300 unsolicited compliments from internal and external customers.

* Attrition of non-retiring PGO staff has consistently declined each year since the new business practices have been in place.

CDC's core values of accountability, respect, and integrity count. When we get it wrong we must own it. The fictitious questions that someone could possibly ask when pursuing a story about PGO were written down, and I own that this was not a good idea. I apologize for this. I wish there was some way I could prevent the harm I see ahead for some of my CDC coworkers who are doing a great job in improving CDC's management and deserve better.

CDC values and respects its employees and contractors. Both are absolutely necessary to our success. PGO's professionals are integral to CDC's continuing excellence: after all, CDC awarded more than 8,700 contract actions for $3.1 billion last year on behalf of CDC and these contracts are managed by both an accountable contracting officer and a project officer. What is important to know is that PGO will continue to improve its processes and report its performance. CDC has also been preparing for some time to bring together under the umbrella of the Management Council a standing committee to oversee our contracting strategies and to develop a framework for assessing their value, and performance. Though I am afraid that some people will think this broad effort is a "knee jerk" to a news article, I know that this is not the case.

I hope this information helps put whatever media stories appear into a balanced context. If you have any questions or concerns, please do not hesitate to contact me directly.


Donna Garland

Chief

Office of Enterprise Communication

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