Federal Times Blogs
Many are the ways in which the government loses money to contractors, but by failing to answer a survey? That’s essentially what happened at the Housing and Urban Development Department, which cost taxpayers more than $267,000 because some of its managers didn’t bother filling out customer satisfaction questionnaires from tech giant Hewlett-Packard.
Here’s the story, according to the department’s inspector general: Under the terms of a 2005 information technology contract, HP has to ask managers in HUD’s Office of the Chief Information Officer every six months how happy they are with the company’s work. If the survey response rate falls below 50 percent, Hewlett-Packard automatically gets an $89,200 bonus.
Three times in a row–from August 2008 to early last year–HUD missed that target, meaning it had to pay Hewlett-Packard a total of $267,600. Although the CIO’s office sent managers reminder notices, “those notices did not emphasize the responsibility and the impact to HUD of them not responding,” the inspector general wrote in an October report. Because survey participants were not anonymous to Hewlett-Packard, the IG added, managers were not motivated to respond “and may not have been candid in their responses.”
Federal Times obtained a redacted copy of the report under the Freedom of Information Act.
The bonuses, it should be noted, are a pittance in comparison to the contract’s total value, which HUD spokeswoman April Brown pegged at around $404 million. Out of a dozen surveys required so far under the contract, the three highlighted by the IG are the only ones where the response rate dropped below 50 percent, Brown said via email. The department has taken steps to make sure it doesn’t happen again, she said.
A Hewlett-Packard spokeswoman had no comment.
Asked why HUD would agree to reward a contractor in that fashion, Brown said the provision is in line with commercial terms for “incentive administration.” At the Project on Government Oversight, spokesman Joe Newman couldn’t name another government contract with a similar deal.
For Hewlett-Packard, Newman said, “it’s almost as if there’s an incentive for them not to really gather feedback from the staff.”