Army officials said Thursday that they would conduct what amounts to an about-face on a 2013 decision that turned over the management of the service’s childcare assistance program to the General Services Administration. The transition failed to deliver millions of dollars in promised cost savings, and by most accounts, harmed the beneficiaries the program is supposed to help.

The initial decision to move the Army Fee Assistance program to GSA management happened at a time when the Army was scrounging for any budget savings it could muster. The program, which pays stipends averaging about $300 per month to 10,000 soldier and Army civilian families who do not have access to childcare on military bases, had been administered by a non-profit organization, Child Care Aware (CCA) at a cost of about $8 million per year. GSA had promised it could run the program for a mere $4 million.

It didn’t work out that way. Not only is the Army now paying GSA $400,000 more per year than it had been paying CCA, but just about everything that could have gone wrong during the transition did, in fact, go wrong.

A backlog of unpaid reimbursement claims started to mount almost immediately after GSA took over the work in August 2014, and by the end of July, the tally of backlogged claims and unanswered customer queries reached 26,000. GSA’s agreement with the Army stipulated that it would pay families within 10 days. In some cases, they waited up to seven months, and many are still waiting.

“Army families enrolled in this program have experienced inadequate customer service and substantial delays. Their phone calls went unanswered and their voice messages and emails were ignored and deleted,” said Carol Ochoa, GSA’s inspector general. “Families have reported severe financial and other hardships resulting from these delays. Some were forced to consider having a spouse quit a job or leave school so they could leave one parent at home with their children, others have had their childcare providers send their accounts to collections, and one family told us they were facing bankruptcy.”

Asked about the program during a hearing of the House Oversight and Government Reform Committee Thursday, Army and GSA representatives made no attempts to defend their performance. Both organizations acknowledged they’d failed the program’s beneficiaries and offered apologies.

“We did not do our due diligence in inspecting the capability of GSA to take on this program,” said Stephanie Hoehne, the director of family, morale and welfare programs at the Army’s Installation Management Command. “We also did not communicate effectively with each other. GSA didn’t let us know they weren’t ready and we didn’t go in and make sure they were ready. That put us on our back foot at the outset of the program.”

And GSA says it’s now clear, in hindsight, that its staffing and IT systems weren’t up to the challenge of taking on the Army contract.

Staffers in the agency’s customer service centers were only able to answer about a third of customers’ incoming phone calls; the rest went to voicemail. Eventually, voicemail and email inboxes were filled to their capacity, and, according to the inspector general, GSA dealt with the problem by deleting the unanswered voicemails: 4,000 in all.

“GSA staff told us they did not have the ‘luxury’ to listen to all of the families’ voicemail messages because of the backlog of higher priority tasks,” the IG said in a written report earlier this week. The investigation found Army childcare customers’ emails were also deleted without any response because the backlog was so severe that employees’ accounts in GSA’s cloud email system were bumping up against their quotas for data storage.

Rep. Jason Chaffetz (R-Utah), the committee chairman, suggested the email deletions may have been a violation of federal record preservation laws.

“If it’s a federal record, the head of the federal agency has to notify the federal archivist if records are improperly destroyed. Did GSA notify the archivist that those records were destroyed?” he asked.

“No, we did not,” said Gerard Badorrek, GSA’s chief financial officer.

GSA records show that officials knew at the time they assumed responsibility for the Army childcare program that the agency lacked sufficient staff to adequately perform the job.

GSA’s own estimates projected that it would need between 55 and 72 contractor employees to adequately serve all 10,000 families. But only 10 workers were on board when GSA first took responsibility for the childcare program.

Later, the agency hired more contract staff after concluding the program was severely under resourced. But GSA and its contractors allowed at least some of them to work before adequate background investigations were conducted. The Office of Personnel Management later determined three out of 20 workers never should have been allowed to handle the sensitive information the job required: two had troubled financial backgrounds and a third had an active arrest warrant.

“Army families’ sensitive information was provided to contractors before they had completed required background investigations,” Ochoa said. “That included Social Security numbers, dates of birth and bank routing information among other things. Despite GSA’s efforts to handle that access problem, other breaches have occurred since then.”

GSA removed those three employees from the Army program, but in a second breach, investigators found that “unauthorized users” were able to gain access to the records of some 8,000 Army customers.

Chaffetz said the Army and GSA have since agreed to provide credit monitoring services to the aggrieved service members, civilians, and family members.

“But I’m tired of the U.S government just saying, ‘Hey, we’re going to give you credit monitoring.’ That ain’t going to cut it anymore,” he said. “We’re doing this by the tens of millions already, and here we have another case of this.”

Lawmakers were also baffled by the fact that GSA seemed unable to handle the workload even after ramping up to an eventual staff of 184 contractors this summer — more than four times as many employees as were used by CCA, which, by most accounts, ran the program successfully and with relatively few complaints.

The Army childcare stipend program had been scheduled to transition to the U.S. Department of Agriculture as part of GSA and the Office of Management and Budget’s previous plans to move the agency’s financial administration lines of business to USDA.

But the Army has since backed out, and now intends to return almost all of the work to CCA via a sole-source contract. But the process of awarding the contract and transitioning the work back to CCA won’t be completed until December, Hoehne said.

And even then, CCA will only be in charge of brand-new claims from that point forward. GSA will retain responsibility for all of the claims that have built up on its watch since last August.

“Honestly, the backlog is in such a state of disrepair at this point that I don’t think any contractor would be willing to take it on,” Hoehne said. “And we’ve been talking with CCA. They need some time to put the staff in place to do this right again.”

While the Army has made no bones about the fact that the transition to GSA was a serious blunder, it has offered few plans to help the families who have been harmed by waiting months for overdue childcare stipends, other than to point them to no-interest loans via the Army’s Emergency Relief fund.

Capt. Karmon Dyches, one of many soldiers who have had to dip into savings or ask for money from family members after several months of missed payments, said she had heard about the loan program through her chain of command. But she found the Army’s response lacking.

“It’s asking us to borrow money that should already be there. It’s a short-term loan that we’re going to have to pay back, and there are a lot of other soldiers out there who probably need that money instead of us,” she said. “The mishandling of this program has failed to let soldiers plan not just for long-term goals, but for immediate needs. Imagine not being able to afford groceries or gas because you had to pay for unexpected childcare costs. Imagine being a new mother or father and being forced to choose between maintaining a new career or to quit working because the unexpected cost of daycare is more than your expected paycheck. Imagine dealing with all of that while your spouse is deployed. And imagine being that deployed mother or father who’s getting phone calls about this once a month. Then try to tell me that your mind is going to be on the mission.”

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