SOCIAL SECURITY ADMINISTRATION
THE SOCIAL SECURITY ADMINISTRATION’S
OVERSIGHT OF MDRC
CONTRACT NO. SS00-06-60075
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Date: December 22, 2008 Refer To:
To: The Commissioner
From: Inspector General
Subject: The Social Security Administration’s Oversight of MDRC Contract No. SS00-06-60075 (A-15-08-18010)
Our objectives were to (1) review the services provided by MDRC and the related costs charged to the Social Security Administration (SSA) for adherence to the negotiated contract terms and applicable regulations and (2) ensure SSA personnel properly monitored the contract.
Accelerated Benefits Demonstration Project
The Disability Insurance (DI) program provides cash and Medicare benefits to qualified disabled individuals under age 65 who are unable to perform substantial gainful activity. After undergoing a 5-month waiting period to receive DI benefits, individuals must wait an additional 24 months to become eligible for Medicare benefits. Many of these newly entitled DI beneficiaries have no health insurance and, therefore, have limited access to medical care when access to those resources might improve their medical condition and increase their ability to improve their self-sufficiency through employment. SSA initiated the Accelerated Benefits (AB) demonstration project to test whether providing immediate health benefits to these beneficiaries will result in improved health and better return to work outcomes.
Contract Number SS00-06-60075
On January 20, 2006, SSA contracted with MDRC to obtain technical assistance in the implementation and evaluation of the AB demonstration project. The AB project provided an immediate medical benefits package and employment support to certain beneficiaries upon approval of their Social Security Disability Insurance (SSDI) claim. The contract stated that the contractor will carry out the implementation, data collection, and evaluation activities for this program. Furthermore, MDRC will provide SSA with a final report, which will address the central research question: “What is the effect of providing accelerated medical benefits on improving the health and return to work outcomes for certain SSDI beneficiaries?” The cost-plus-fixed-fee contract was awarded for approximately $40.9 million. As of April 2008, there were six modifications to this contract and the estimated total cost to the Government for full contractor performance of this contract was approximately $42.9 million. The approximately $2 million increase was due to the inclusion of the health benefits packages and the system security plan. The contract period of performance is January 20, 2006 to January 19, 2011.
MDRC is expected to enroll 2,000 individuals in the AB demonstration project in 2 phases. Participants selected for the AB demonstration project must meet all of the following criteria:
• newly entitled to SSDI benefits;
• under age 55;
• no health insurance coverage;
• 18 or more months away from being eligible for Medicare benefits; and
• living in a participating site.
Beneficiaries selected for the demonstration project were assigned randomly to one of three treatment groups: AB, AB Plus, and control (see Appendix C for definitions). MDRC completed Phase I and enrolled 66 participants, as follows: 13 participants for AB group; 26 participants for AB Plus group; and 27 participants for control group. All participants will receive SSDI cash benefits. Currently, MDRC is in Phase II and is expected to enroll the remaining 1,934 individuals.
RESULTS OF REVIEW
With the exception of notifying SSA of all staff assigned to the contract for Agency suitability determinations, MDRC generally adhered to the contract terms and delivered the services SSA requested under the contract. We reviewed the 66 beneficiaries selected for Phase I of the demonstration project and determined they met the criteria for selection. In addition, we found that the same criteria properly excluded 355 ineligible beneficiaries from participating in the AB demonstration project. Also, we found that MDRC was operating within contract guidelines for the total cost of the contract.
While SSA properly managed and monitored the contract, we identified a number of instances where the Agency could have been more efficient in the initial planning, management and monitoring of the contract. Specifically, we found MDRC completed Phase I within the required time frames. However, this was achieved despite inefficiencies surrounding the (1) development of the health benefits package,
(2) identification of the target population, (3) management of the Office of Management and Budget’s (OMB) clearance process, and (4) inclusion of a systems security plan.
Suitability Determination Issues
We found three suitability determination issues: (1) contractor failed to obtain suitability determinations for individuals working on the project, (2) individuals received suitability determinations under other contracts, and (3) a contract employee with an “unsuitable” determination had access to personally identifiable information (PII).
Contractor Failed to Obtain Suitability Determinations for Individuals Working on the Project
MDRC provided a list of 315 individuals working on the project as shown in Table 1:
Table 1 - Number of Individuals on AB Project
Description Number of
Contractors With Access to PII 156
Contractors Without Access to PII 159
When we compared MDRC’s list to the names MDRC provided to SSA for suitability determinations, we identified 6 individuals who did not obtain a suitability determination from SSA’s Center for Personnel Security and Project Management (CPSPM). In this instance, MDRC did not comply with the terms of the contract. According to the contract, SSA’s protective security suitability program officer makes the final suitability determination for each contractor employee who does and does not require access to program or sensitive systems information. Therefore, we recommend that SSA consistently monitor the staffing of the contractor and any subcontractors to ensure they are receiving the appropriate suitability determinations.
Individuals Received Suitability Determinations Under Other Contracts
Further analysis of the 315 individuals whom MDRC identified as working on the AB contract revealed that 127 of the individuals received suitability determinations under other contracts with SSA, as shown in Table 2.
Table 2 - Individuals with a Suitability Determination
AB Contract Under Other
Contracts/Grant No Suitability Determination Performed
Access to PII 102 54 0 156
No Access to PII 80 73 6 159
Total 182 127 6 315
It appears MDRC assigned these 127 people to the AB contract without notifying SSA. In situations where contracts have similar suitability requirements, such a practice may not create a significant risk. However, when the contracts have different suitability requirements, there is a risk that individuals assigned to one contract may not have the proper suitability determination to work under another contract. In other words, the adjudication level on the other contracts should be no less than the adjudication level on the AB contract. SSA cannot make an assessment of whether the individuals have the proper suitability determination unless they know who is assigned to the contract.
To determine whether MDRC’s failure to identify all contract employees resulted in individuals being assigned to the contract without the proper suitability determination, we focused on the 54 employees who had access to PII but had a suitability determination under another contract with SSA. CPSPM reviewed its documentation for the 54 individuals and determined that the adjudication levels for the other contracts were not lower than the level required for the AB contract.
CPSPM personnel stated that a contractor employee could have a suitability determination under another contract without getting additional clearance. However, CPSPM should be notified so SSA can determine whether the appropriate level of investigation was conducted and its database records adjusted to reflect that the individual is working on another contract.
According to SSA policy, all SSA positions must be designated at the proper
risk/sensitivity levels commensurate with the public trust or national security responsibilities and attributes of the position as they relate to the efficiency of the service. Furthermore, the position risk-level designations must be clearly and properly established as an initial step in filling all SSA and contractor positions to ensure the proper type and timing of investigations. The required investigation serves as a basis for ensuring that employment of the individual in a sensitive or public trust position is appropriate.
We recommend that SSA include appropriate language in any future contracts to ensure the contractor notifies SSA’s contracting officer and contracting officer technical representative (COTR) of all contractor staff assigned to the contract. Subsequent to our fieldwork, SSA personnel stated that new contract language was developed to ensure that CPSPM and the COTR will be notified when any contractor or subcontractor personnel begin working under the contract.
Contract Employee with “Unsuitable” Determination had Access to PII
We reviewed the suitability determinations for 156 contractor employees on this contract who had access to PII. We identified one instance where the contractor had access to PII, but SSA determined the individual was “unsuitable” to work on the contract. In this instance, MDRC misunderstood SSA’s initial notification statement “suitability determinations were completed” to mean that this individual had a “suitable” determination. When MDRC discovered the "unsuitable" determination, the employee (a subcontractor with Mathematica Policy Research, Inc.) was removed from the project. According to MDRC, the unsuitable employee worked on the project for 2 months.
We did not independently determine whether PII was actually exposed during the period the contractor employee worked on the contract. However, MDRC informed the COTR of the breach and SSA decided that because there was no reason to believe that the PII disclosed was “likely to lead to misuse,” an incident report was not needed.
According to the contract, personnel who perform work under the contract should obtain suitability determinations before working on the contract. Therefore, SSA must remain committed to safeguarding its sensitive information. We recommend that SSA monitor the staffing of the contractor and any subcontractors to ensure only approved staff is allowed access to SSA’s facilities and program and sensitive information.
Inefficiencies in the Contract’s Initial Planning, Management and Monitoring
We identified a number of instances where the Agency could have been more efficient in the contract’s initial planning, management and monitoring. The contract was modified for various reasons (for example, adding the health benefits requirement; adding a system security plan; increasing available funding for medical claims and processing fees; and changing the deliverable schedule), and the due dates for some of the deliverables were not revised. As a result, some of the early deliverables were behind schedule and in one instance, as much as 476 days.
Currently, the project is on track to meet the due dates. However, the process could have been more efficient had additional attention been given to the (1) development of the health benefits package, (2) identification of the target population, (3) management of the OMB clearance process, and (4) inclusion of a systems security plan.
Development of the Health Benefits Package for Participants
SSA personnel stated that the project was behind schedule because MDRC needed to develop the health benefit packages for the participants. SSA had originally planned to award a contract for a Health Benefits Administrator who would oversee the health benefits packages for participants in all of the demonstration projects for the Office of Retirement and Disability Policy’s Office of Program Development and Research (OPDR). Therefore, the initial MDRC contract did not include a health benefits
package. OPDR did not award the health benefits contract, and the AB contract was amended to allow MDRC to develop the health benefits package for the project participants.
Identification of the Target Population
Initially, the project was supposed to target SSDI beneficiaries who had impairments most likely to improve and who, with medical and employment support, would most likely return to work. This population included beneficiaries whose records were coded Medical Improvement Expected (MIE) and Medical Improvement Possible (MIP). MDRC expected most of SSA’s sample file of the population to have musculoskeletal or mood disorders. However, the sample file contained other types of impairments under the MIE and MIP designations. In November 2006, SSA agreed to expand the population to include all new SSDI beneficiaries. In our opinion, had SSA performed the background work on the population earlier, the target population may have been defined sooner.
Management of the OMB Clearance Process
The original contract stated that the contractor shall obtain the required OMB clearance through the COTR before expending any funds or making public contacts for the collection of data. Specifically, section H-11 of the contract states
The Paperwork Reduction Act of 1986 (Pub. L. 96-511) shall apply to this contract for the requirement(s) to collect or record information calling either for answers to identical questions from 10 or more persons other than Federal employees, or information from Federal employees which is outside the scope of their employment, for use by the Federal government or disclosure to third parties. No plan, questionnaire, interview guide or other similar device for collecting information (whether repetitive or single-time) may be used without first obtaining clearance from the Office of Management and Budget (OMB).
In August 2006, SSA required that MDRC submit the “full clearance” package instead of the “generic clearance” package. MDRC drafted the Federal Register Notice for the AB demonstration project, which was part of the OMB clearance package. The OMB clearance package was for the baseline and follow-up surveys.
In November 2006, MDRC learned it was necessary to submit a supporting statement with the Federal Register Notice as well as brief OMB on the OMB clearance package. Also, the Federal Register Notice and OMB clearance package were revised for changes to the project target population and follow-up surveys. The Federal Register Notice was published in January 2007, and OMB provided its approval in August 2007. Also, SSA did not account for the OMB clearance process in the deliverable schedule even though it was a contract requirement. The OMB clearance approval should have been included as a deliverable item. Therefore, SSA should have appropriately adjusted the timeline for the OMB clearance process as part of the contract planning, managing and monitoring.
Inclusion of a System Security Plan
Initially, the MDRC contract awarded in January 2006 did not require a system security plan. According to the contracting officer, when the request for proposal was written, SSA did not anticipate the need for the systems security requirements. However, SSA informed MDRC that a system security plan that conformed to the standards set forth by the National Institute of Standards and Technology was required. Some of MDRC’s work was delayed while awaiting SSA’s approval of the system security plan. In September 2007, the AB contract was amended to incorporate the requirement for the system security plan. The system security plan for MDRC’s subcontractor was approved in October 2007, and the system security plan for MDRC was approved in December 2007.
Based on our meeting with MDRC and our review of the deliverables, as of May 2008 SSA had received all of the deliverables that were due. According to the COTR, none of these delays will impact the completion of the project by 2011. Because the survey work did not require as much time as originally estimated, MDRC was able to get back on schedule. Better planning may have reduced the risks of the contract falling behind at the beginning. In addition, SSA needs to closely monitor the delivery schedule to ensure future deliverables are timely.
CONCLUSION AND RECOMMENDATIONS
With the exception of notifying SSA of all staff assigned to the contract for Agency suitability determinations, MDRC was conducting the AB demonstration project within the contract terms and delivered the services required under the contract. However, SSA needs to enhance its oversight regarding suitability determinations for contractors.
Also, SSA personnel were properly managing and monitoring the MDRC contract; however, we identified a number of instances where the Agency could have been more efficient in the initial planning, management and monitoring of the contract.
Specifically, we recommend SSA:
1. Obtain and maintain an updated list of all contractor personnel (including subcontractors) working on the AB contract with or without access to PII.
2. Ensure that contractor personnel (including subcontractors) working on the AB contract receive the appropriate suitability determinations even if the individual was previously adjudicated under another contract.
3. Ensure that contractor personnel (including subcontractors) assigned to the AB contract have a favorable suitability determination before allowing the individual to work on the project.
4. Monitor the delivery schedule on the MDRC contract to ensure timely deliverables.
AGENCY COMMENTS AND OIG RESPONSE
SSA provided specific comments on the suitability issues and the delivery schedule discussed in our report. SSA agreed with our recommendations. SSA’s comments are included in Appendix E.
Patrick P. O’Carroll, Jr.
APPENDIX A – Acronyms
APPENDIX B – Scope and Methodology
APPENDIX C – Treatment Groups
APPENDIX D – Suitability Factors
APPENDIX E – Agency Comments
APPENDIX F – OIG Contacts and Staff Acknowledgments
AB Accelerated Benefits
CPSPM Center for Personnel Security and Project Management
COTR Contracting Officer Technical Representative
DI Disability Insurance
MIE Medical Improvement Expected
MIP Medical Improvement Possible
OIG Office of the Inspector General
OMB Office of Management and Budget
OPDR Office of Program Development and Research
OPM Office of Personnel Management
PII Personally Identifiable Information
SSA Social Security Administration
SSDI Social Security Disability Insurance
U.S.C. United States Code
Scope and Methodology
To accomplish our objectives, we:
Reviewed the MDRC Contract No. SS00-06-60075 and contract modifications for Fiscal Years 2006 through 2008. Also, we determined whether the increase in the contract cost appeared reasonable.
Reviewed the Social Security Administration’s (SSA) Program Operations Manual System sections related to Accelerated Benefits. In addition, we reviewed SSA’s Administrative Instructions Manual System, Information Systems Security Handbook.
Reviewed 66 participants selected for enrollment in Phase I of the demonstration project.
Reviewed 355 individuals screened and found to be ineligible to participate in Phase I of the demonstration project.
Reviewed 5 invoices, each totaling over $200,000, and 1 adjustment invoice from the 24 invoices paid during the period January 2006 through November 2007. The 24 invoices totaled approximately $3.1 million.
Reviewed deliverables that were due from January 2006 through May 2008.
Evaluated internal controls at MDRC and SSA’s Offices of Acquisition and Grants and Finance to determine whether the processes were functioning properly, such as, contract invoices were properly reviewed and paid.
Evaluated Office of Program Development and Research’s oversight of MDRC to ensure the contractor’s compliance with the contract, which included SSA’s examining and approving of MDRC’s invoices for our sample group.
Interviewed staff at MDRC and SSA’s Offices of Program Development and Research, Acquisition and Grants, and Finance.
We performed our audit at the SSA Headquarters and MDRC headquarters in New York from December 2007 through July 2008. We found the data used for this audit were sufficiently reliable to meet our objectives. The entities audited were the Offices of Acquisition and Grants and Program Development & Research.
We conducted this audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our objectives.
The 2,000 participants in the Accelerated Benefits (AB) Demonstration will be placed in 1 of 3 treatment groups.
The participants in the AB group receive their regular Social Security Disability Insurance (SSDI) benefits as well as health benefits. The health benefits will pay for most of the participants’ health care costs up to $100,000. The health plan is available until the participant becomes eligible for Medicare coverage, reaches the $100,000 benefit limits, or the project ends. The plan is only available to the participant and it does not include the participant’s spouse or dependents.
The participants in the AB Plus group receive their regular SSDI benefits as well as health benefits and support under a care management model. This model involves working with a team of coaches, nurses and employment counselors, who can help the participant achieve their goals and access the supports needed. The health plan is available until the participant becomes eligible for Medicare coverage, reaches the $100,000 benefit limits, or the project ends. The plan is only available to the participant and does not include the participant’s spouse or dependents.
The participants in the control group will retain their regular SSDI benefits. The participants in this group are compared with the other treatment groups in determining whether receiving health benefits affects participants’ health and employment outcomes.
Section H-7 of the contract provides the procedures for obtaining suitability determinations for contractor personnel who will be performing under the contract. Specifically, the contract states that suitability factors include:
• Delinquency or misconduct in prior employment.
• Criminal, dishonest, infamous, or notoriously disgraceful conduct.
• The nature and seriousness of the conduct.
• When the conduct occurred.
• The applicant’s or employee's age at the time of the conduct.
• The circumstances surrounding the conduct.
• Intentional false statement, deception, or fraud on application forms.
• Habitual use of intoxicating beverages to excess.
• Abuse of narcotics, drugs, or other controlled substances.
• Reasonable doubt as to the loyalty of the individual to the Government of the United States.
• The kind of position for which the person is applying or in which the person is employed.
• Contributing social and environmental conditions.
• The absence or presence of rehabilitation or efforts towards rehabilitation.
Date: December 16, 2008 Refer Refer To: S1J-3
To: Patrick P. O'Carroll, Jr.
From: James A. Winn /s/
Chief of Staff
Subject: Office of the Inspector General (OIG) Draft Report, "The Social Security Administration’s Oversight of MDRC Contract No. SS00-06-60075” (A-15-08-18010)--INFORMATION
Thank you for the opportunity to review and comment on the draft report. We appreciate OIG’s efforts in conducting this review. Our response to the report findings and recommendations is attached.
Please let me know if we can be of further assistance. You may direct staff inquiries to
Ms. Candace Skurnik, Director, Audit Management and Liaison Staff, at (410) 965-4636.
COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL (OIG) DRAFT REPORT, “THE SOCIAL SECURITY ADMINISTRATION’S OVERSIGHT OF MDRC CONTRACT NO. SS00-06-60075” (A-15-08-18010)
We appreciate the careful and comprehensive work that the OIG auditing team did on this report and believe that the changes we have made to the project as a result of the OIG recommendations will reduce the potential for problems during the remainder of the contract.
Our response to the recommendations is as follows.
Obtain and maintain an updated list of all contractor personnel (including subcontractors) working on the Accelerated Benefits (AB) contract with or without access to personally identifiable information (PII).
We agree. We have received the list and will regularly update it as we add new employees to the project.
Ensure that contractor personnel (including subcontractors) working on the AB contract receive the appropriate suitability determinations even if the individual was previously adjudicated under another contract.
We agree. We have developed a new application, the Contractor Enrollment Request Management System (CERMS). CERMS will help us better manage the contractor personnel screening process. We will also use the updated list that we develop as a result of our action on the first recommendation to better monitor the suitability determination of all individuals working on the project.
Ensure all contractor personnel (including subcontractors) who work on the AB contract have a favorable suitability determination before allowing the individual to work on the project.
We agree. We had a discussion with MDRC regarding this issue and learned one individual was allowed to work on the contract before the suitability determination
was received. MDRC’s explanation was that they misunderstood an e-mail message stating that the determinations for a group of employees “were completed” to mean that those determinations were favorable. However, one of the employees had an “unfavorable” determination, and that individual was removed from the contract. We will continue to remind MDRC that all individuals must have a favorable suitability determination before performing work on the project. The new procedures that are in place, such as CERMS, will help us minimize the chances of an individual working on the project before receiving a favorable determination. The actions described in the first two recommendations will also help us address this recommendation.
Monitor the delivery schedule on the MDRC contract to ensure timely deliverables.
We agree. We have a spreadsheet that we are using to track all contract deliverables and will use it, along with regular meetings with the contractor, to ensure that the project remains on track for timely completion of all deliverables.
OIG Contacts and Staff Acknowledgments
Kristen Schnatterly, Director, Technical Services Division (410) 965-0433
Mark Meehan, Acting Audit Manager, Financial Audit Division (410) 966-7147
In addition to those named above:
Donna Parris, Auditor-in-Charge
Tonia Hill, Auditor
For additional copies of this report, please visit our web site at www.socialsecurity.gov/oig or contact the Office of the Inspector General’s Public Affairs Staff Assistant at (410) 965-4518. Refer to Common Identification Number
Commissioner of Social Security
Office of Management and Budget, Income Maintenance Branch
Chairman and Ranking Member, Committee on Ways and Means
Chief of Staff, Committee on Ways and Means
Chairman and Ranking Minority Member, Subcommittee on Social Security
Majority and Minority Staff Director, Subcommittee on Social Security
Chairman and Ranking Minority Member, Committee on the Budget, House of Representatives
Chairman and Ranking Minority Member, Committee on Oversight and Government Reform
Chairman and Ranking Minority Member, Committee on Appropriations, House of Representatives
Chairman and Ranking Minority, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations,
House of Representatives
Chairman and Ranking Minority Member, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, U.S. Senate
Chairman and Ranking Minority Member, Committee on Finance
Chairman and Ranking Minority Member, Subcommittee on Social Security Pensions and Family Policy
Chairman and Ranking Minority Member, Senate Special Committee on Aging
Social Security Advisory Board
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
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