GovernmentExecutive.com

From my colleage Rob Brodsky:

At today’s Senate Homeland Security and Governmental Affairs Committee hearing, several lawmakers brought up my March 18th article detailing some of the concerns with the first 11 Recovery Act contracts. Included among those contracts was a $460,000 contract to install 22 precast concrete toilet buildings in Missouri's Mark Twain National Forest.

The article has garnered a good deal of attention [both positive and negative] from lawmakers, agency leaders and interest groups. But, much of the discussion has missed the intent of the story, so I wanted to take a moment to clarify what the article said and did not say.

The article does not suggest that agencies used GSA Schedules or blanket purchase agreements with the intent of avoiding competition. Rather, the story raised the question of whether these types of contracts are in compliance with the administration’s stated goal of awarding Recovery Act contracts with maximum competition. That is not to say that GSA Schedules or BPAs are not competitive. They are and can be a useful tool for agencies to find competent, pre-vetted contractors and move funds out the door quickly. However, I noted that it was unclear from the OMB’s initial guidance to federal agencies how these types of contracts fit into the administration’s state competition goal.

Secondly, the story deliberately did not suggest that the contracts, including the toilet building award, were wasteful or overpriced. Sen. Claire McCaskill said today that the contract was “not a bad deal.” She may be right. But my goal was not to debate whether this was a wise or proper use of taxpayer funds. The story simply described, in detail, the nature of the contract and used it as an example of the type of early awards that had been issued. No snarky toilet jokes or mentions of gold-plated military toilet seats.

Much of this discussion comes back to the central idea behind transparency. Government Executive and undoubtedly dozens of other media outlets are going to examine Recovery Act contracts with intense scrutiny. The administration has even encouraged such an examination. However, I would encourage readers not to leap to conclusions that the mere mention of specific contracts equals some form of criticism about its quality. Sometimes transparency is just … transparency.

Three teams from the Commission on Wartime Contracting have touched down in Iraq and Afghanistan as part of a 10-day investigative trip to the two war zones.

Investigators with experience ranging from auditing to military and diplomatic to management have begun their work inspecting job sites, reviewing documents, conducting interviews and participating in briefings. The commission said the team members have detailed agendas for topics, sites and programs to look into.

The Commission on Wartime Contracting, created by the fiscal 2008 Defense authorization act, is charged with investigating reconstruction, support and security contracts in Iraq and Afghanistan and reporting back to Congress. The commission will deliver an interim report this spring and a final report in the summer of 2010. The group will issue recommendations on the reliance of contractors in wartime settings, contractor performance and accountability, management practices, contractor use of force and potential violations of law.

“We can do a lot of work with stateside interviews and computerized research, but there's no substitute for first-hand investigation," said Commission Co-Chair Michael Thibault. “There are about 200,000 contract employees working in Iraq and Afghanistan, outnumbering U.S. troops in the area. The unprecedented reliance on contractors in support of our foreign-policy and military objectives has been accompanied by many problems."

Brian Friel, a reporter from our sister publication National Journal, is covering a House Budget Committee hearing where Robert Hale, DoD comptroller is testifying. Friel says that House Budget Committee Chairman John Spratt asked Hale why DoD’s costs have gone up so much higher than the rate of inflation over the past decade. Hale said one of the reasons is that jobs that have been outsourced to contractors have been more expensive than in-house personnel were. To get costs under control, Hale said the Pentagon will look at converting contractors back to government personnel. We “need to look carefully at how many contractors we’re using,” Hale said.

This is a pretty cut and dry statement from the comptroller. Unions have long claimed that outsourcing costs the government more, while contractor associations have disputed this. It's increasingly looking like there will be more than a suspension of Circular A-76, there may very well be a significant reversal.

Click here to see the procurement memo Pres. Obama issued today. We'll post a follow-up story in a couple of hours.

From Robert Brodsky:

The Omnibus spending bill, which passed the House on Wednesday, could spell the end of the highly-controversial public-private job competitions.

The bill includes a one-year government-wide ban on any new A-76 job competitions for federal work under the Office of Management and Budget contracting rules. The job competitions have long been fought by government labor unions and some congressional Democrats.

“These provisions are the clearest sign yet that Congress recognizes the previous administration’s competitive sourcing initiative has been a disaster,” said Colleen Kelley, president of the National Treasury Employees Union

The bill would require federal agencies to establish guidelines for insourcing work that is now being performed by private contractors, but at one point was done by federal employees and would prohibit funding for the privatization of federal tax collection.

The Senate Homeland Security and Government Affairs Committee has already announced the first of what is sure to be a very, very long string of oversight hearings on the stimulus.

Sens. Lieberman and Collins said they will hold a hearing on March 5, with OMB Director Peter Orszag, GAO Acting Comptroller General Eugene Dodaro and Phyllis Fong, chair of the Council of Inspectors General on Integrity and Efficiency, testifying.

The senators said in a press release that their inquiry will focus on “ensuring that appropriate measures are taken to prevent cost overruns as agencies enter into contracts to spend [American Recovery and Reinvestment Act] funds, that strict oversight of contractor performance occurs, that grant conditions are met, and that fraud is promptly prosecuted.”

By listing their specific concerns, though, Lieberman and Collins, are highlighting the government’s failure to prevent cost overruns, poor performance and fraud in the past, both during contingencies like Katrina, Iraq and Afghanistan and in everyday procurements. Despite the additional funding for GAO and inspectors general attached to the stimulus, it seems unrealistic to expect more from federal agencies during this spending spree than you’d see on any given Monday/Tuesday/Thursday.

It will be very interesting to see who becomes the scapegoat for the inevitable waste, fraud and abuse of stimulus funds. It seems likely with a heavily Democratic congress that lawmakers would turn their ire on contractors rather than Obama administration officials, but Republicans like Rep. Darrel Issa, ranking member of the House Oversight and Government Reform Committee, are likely to play a prominent oversight role.

What do you do after spending more than 2,100 hours flying fighter jets, including a stint as a member of the elite Air Force Thunderbirds unit?

How about working for the government's central procurement agency? That's what Air Force Maj. Nicole Malachowski, the first woman to fly with the Thunderbirds, is doing. The General Services Administration announced Tuesday that Malachowski has joined the agency as a White House fellow for one year.

“GSA is an amazing agency that helps our nation in more ways than most people realize,” Malachowski said. “I’m thrilled to be here and looking forward to working on everything from presidential transition to emergency response and recovery issues.”

Belatedly, I must take note of Robert O'Harrow's piece in today's Washington Post about the Food and Drug Administration's apparent effort to use a contract with an Alaska Native corporation to funnel money to a Washington public relations firm.

This is just the latest in a long line of reports about the growing -- and questionable -- use of ANC contracts by federal agencies. We've published dozens of stories about it over the years.

For background on the whole ANC contracting issue, see this excellent 2005 Government Executive story by Kimberly Palmer.

I wonder what Sarah Palin's position on the practice is.

Defense Secretary Robert Gates continues to pull no punches in challenging the institution he leads. In a speech at National Defense University yesterday, he again took issue with the Pentagon's approach to procurement:

Support for conventional modernization programs is deeply embedded in our budget, in our bureaucracy, in the defense industry, and in Congress. My fundamental concern is that there is not commensurate institutional support -- including in the Pentagon -- for the capabilities needed to win the wars we are in, and of the kinds of missions we are most likely to undertake in the future.

"In recent years," Gates said, major defense platforms "have grown ever more baroque, ever more costly, are taking longer to build, and are being fielded in ever dwindling quantities." He questioned whether an emphasis on such systems had taken the focus away from procuring "specialized, often relatively low-tech equipment for stability and counterinsurgency missions."

And how do we institutionalize procurement of such capabilities – and the ability to get them fielded quickly? Why did we have to go outside the normal bureaucratic process to develop counter-[improvided explosive device] technologies, to build [mine-resistant ambush-protected vehicles], and to quickly expand our [intelligence, surveillance and reconnaissance] capability? In short, why did we have to bypass existing institutions and procedures to get the capabilities we need to protect our troops and pursue the wars we are in?

Conventional military modernization programs, Gates said, "seek a 99 percent solution in years. Stability and counterinsurgency missions -- the wars we are in -- require 75 percent solutions in months. The challenge is whether in our bureaucracy and in our minds these two different paradigms can be made to coexist."

Treasury Secretary Henry Paulson gets a lot more than $700 billion to spend in the financial bailout bill about to be passed in rejected by Congress. The bill also gives him virtually unprecedented authority to run a federal operation:

The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following:
(1) The Secretary shall have direct hiring authority with respect to the appointment of employees 5 to administer this Act.
(2) Entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.

Notice the "without limitation" part. And in case that's not perfectly clear with respect to contracting, the legislation further spells it out: "the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest."

The legislation creates an inspector general and an oversight board to oversee the new operation, but with this kind of authority, what could they possibly find that would be out of bounds?