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Congress Focuses Attention on Contracting
2007 Volume 11-2
In This Issue
Congress Focuses Attention on Contracting
Letter from the Executive Director
House Passes Whistleblower Legislation Despite Veto Threat
Dr. Ned Feder Joins POGO Staff
MDA Is All Wet
POGO Presents at International Forum
POGO Promotes Doing Business Only With Responsible Contractors
Looking for More?
Congress Focuses Attention on Contracting
In light of such contracting scandals as those surrounding Iraq reconstruction and the Hurricane Katrina response, Congress has begun to focus on the government’s contracting policies that lack necessary transparency and competition. This new scrutiny has resulted in myriad legislative initiatives aimed at improving the flawed contracting system.
POGO is currently tracking the nearly twenty contracting-related bills as they move their way through the legislative process. Of special interest are H.R. 1362 and S. 32, both of which have contributed content to their respective chambers’ fiscal year 2008 National Defense Authorization bills.
The Accountability in Contracting Act (H.R. 1362), sponsored by House Oversight and Government Reform Committee Chairman Henry Waxman (D-CA), recently passed the House. If it also passes the Senate, the bill will go a long way toward creating a more accountable and competitive contracting system—saving American taxpayers millions of dollars at the same time. For instance, one provision prevents contractors from grossly over-charging the government by curbing the use of non-competitive and cost-reimbursement contracts. An amendment to the bill, offered by Representative Michael Castle (R-DE), will further protect taxpayers and make the system more accountable by requiring government contractors and federally funded research and development centers to comply with certain conflict of interest restrictions. Both Chairman Waxman and Representative Castle were able to introduce some of their language into the House version of the Defense Authorization Bill.
On the Senate side, Senator John McCain (R-AZ) introduced the Defense Acquisition Reform Act of 2007 (S. 32). If passed, S. 32 will be invaluable in changing the government’s contracting culture, particularly that of the Department of Defense. The bill will, among other things, restrict the use of multi-year contracts for major weapons systems and set criteria for the disbursement of award fees. Senator McCain was able to incorporate many of S. 32’s provisions into the Senate’s version of the Defense Authorization Bill during the Senate Armed Services Committee markup.
The up-coming House and Senate conference (which is a meeting between members of the two chambers to reconcile differences between the House and Senate versions of a bill) could add momentum to the contracting pendulum as it swings in a more taxpayer-friendly direction. POGO is excited about the support Congress has shown for improving the government’s contracting system, but much more still needs to be done. We continue to work with legislators to remedy the problems in federal contracting policy, and expect additional legislation that will directly address contractor accountability and misconduct to be introduced this summer.
Letter from the Executive Director
Dear Friends,
Who would have thought that Congress could become so interested in the government contracting system? Yet Members of Congress have now introduced more than a dozen bills in an attempt to fix that broken system. A particularly good bill has passed the House and is now waiting for Senate action. Congress gets high marks for tackling this arcane (and yes, sometimes boring) but vitally important topic. Without proper oversight, contracting decisions can place taxpayer dollars—and even lives, as in the case of Hurricane Katrina—at risk. You can read more about these bills in our Page 1 article.
Just as exciting is the progress finally being made on whistleblower protections (see our Page 3 article). As with government contracting, great legislation has passed the House and is now in the hands of the Senate. You can influence the outcome on the contracting and whistleblower issues by letting your Senators know you want them to pass strong legislation as soon as possible.
In addition to working on the above issues, POGO has also been busy helping Congress with its renewed efforts to conduct oversight. We have made suggestions about oversight priorities, responded to requests for information from congressional investigators, provided testimony on numerous issues, and held our monthly bi-partisan Congressional Oversight Training Seminars for Hill staff.
The most exciting aspect of this activity is that most of it is genuinely bi-partisan. Good government is the responsibility of both parties, and it’s heartening to see them working together to promote accountability. POGO is having a terrific time with this rebirth of oversight, and will continue working with both parties to ensure that the enthusiasm for good government is not just a passing fad. We’ll keep you informed of our progress.
Sincerely,
Danielle Brian, Executive Director
House Passes Whistleblower Legislation Despite Veto Threat
In March 2007, the House of Representatives passed comprehensive whistleblower protection legislation for the first time in more than ten years. The Whistleblower Protection Enhancement Act of 2007 (H.R. 985) repairs the damage done to federal employee whistleblower protections by hostile judicial rulings. At the same time, the bill seeks to extend new protections to airport baggage screeners, government contractors, and national security employees.
POGO joined a bi-partisan group of organizations, including the American Federation of Government Employees, Government Accountability Project, Liberty Coalition, Openthegovernment.org, National Taxpayers Union, and Union of Concerned Scientists, in supporting H.R. 985.
A recent poll found that 79 percent of likely voters support congressional action to “institute a strong whistleblower law.” But despite widespread public support for strong whistleblower protections, the White House has threatened to veto the bill if it comes before the President for signature. According to the White House’s Statement of Administration Policy, the existing whistleblower protections are “sufficient to promote and protect genuine disclosures of matters of public concern.” This statement couldn’t be more wrong.
“The White House’s claim is naïve at best,” said POGO Executive Director Danielle Brian. “Conscientious whistleblowers, who are aware of corruption, illegal activity, and incompetence, currently have no safe channels to expose wrongdoing. Without safe channels, insiders can’t come forward with information, and there are no more important voices than these insiders to make our nation safer and more secure.”
Now that H.R. 985 has passed the House—with a wide enough margin (331-94) to overrule a veto—POGO, as well as other concerned organizations, has focused its attention on the Senate.
POGO thanks the Representatives who worked on the bill, including Representatives Henry Waxman (D-CA), Todd Platts (R-PA), Tom Davis (R-VA), Christopher Shays (R-CT), Chris Van Hollen (D-MD), Carolyn Maloney (D-NY), and Bruce Braley (D-IA).
Dr. Ned Feder Joins POGO Staff
POGO is pleased to announce that Dr. Ned Feder recently joined the staff of POGO following a 40-year career at the National Institutes of Health (NIH). “POGO is extremely fortunate to have Doctor Feder join our team,” said POGO Executive Director Danielle Brian. “He has a wealth of experience that will benefit the American public.” Doctor Feder has opened a new area of investigative inquiry for POGO, examining how conflicts of interest and money compromise scientific integrity.
These issues are not new to Doctor Feder: While he was with NIH, he conducted ground-breaking analyses into both issue areas. Doctor Feder joined NIH in 1967 as the head of the Section on Biophysical Histology, and conducted basic research in cell biology. In the mid-1980s, he and an NIH colleague began to study professional misconduct among biomedical researchers and found that violations of ethical standards were common. Published reports on their controversial observations drew attention in academia, in the press, and on Capitol Hill, particularly in hearings by a subcommittee of the House Energy and Commerce Committee. Over the years, Doctor Feder has published articles in the scientific and lay press on a wide range of topics including histochemistry, cell biology, mycology, scientific misconduct, and conflicts of interest. He received an M.D. degree from Harvard Medical School, and was a faculty member of the Harvard Biology Department prior to joining NIH.
Doctor Feder is currently conducting analysis in several key topic areas including the impact patent rights may have on scientific efforts to develop a vaccine for a pandemic flu virus; and how financial conflicts of interest have harmed the integrity of scientific research in programs financed by NIH. Recently, the NIH Inspector General’s Office announced that it would investigate these financial conflicts of interest. To learn more about these investigations, visit www.pogo.org/.
POGO recently exposed that rainfall in Fort Greely, Alaska, last summer damaged several missile defense interceptor silos that were under construction. The damage set the program back months and cost taxpayers at least $38 million. This previously undisclosed episode raises questions about the quality of lead contractor Boeing’s work, and about the Missile Defense Agency’s (MDA) ability to hold its contractors accountable—MDA has continued to award sole source contracts to Boeing despite repeated cost overruns, significant schedule slips, questionable performance, and misconduct.
From mid-June to early July, rainfall struck Fort Greely, flooding six interceptor missile silos and seven silo interface vaults (SIVs) to varying degrees (two silos filled with more than 50 feet of water). The silos and SIVs were still under construction, and no missiles were in the silos at the time.
The SIVs, underground rooms adjacent to the silos that house critical electronics, were more severely affected. A Boeing internal assessment reported that electronic and mechanical systems of three of the SIVs must be completely replaced. An additional SIV suffered severe structural damage, moving vertically in the ground, like a house shifting off its foundation.
POGO’s sources say Boeing argues that North Korea’s missile tests interrupted Boeing’s work, preventing the contractor from protecting the silos from the rain. Boeing’s excuse, however, is considered by some insiders to be a poor one for neglecting the incomplete silos. One well-placed government source said of the failure to take action before significant flooding occurred, Boeing “seem[s] to be saying that they are more or less completely unaware of their surroundings … .”
POGO Presents at International Forum
In March, POGO Senior Investigator Peter Stockton and Princeton Professor Frank von Hippel presented their paper on the necessary consolidation of the U.S. nuclear weapons complex at a conference held at the International Atomic Energy Agency in Vienna, Austria. In their presentation, Mr. Stockton and Professor von Hippel highlighted the importance of adequately securing special nuclear materials (SNM)—plutonium and highly enriched uranium—from terrorists. They also used POGO’s role in getting a particularly dangerous nuclear weapons complex site de-inventoried of its SNM as an example for how non-governmental organizations (NGOs) can effectively assist governments in better protecting nuclear materials.
As Mr. Stockton and Professor von Hippel pointed out, it is particularly important that governments adequately secure plutonium and highly enriched uranium because they are the nuclear materials of choice for terrorists. If terrorists obtained even a limited amount of these materials, they could easily create an improvised nuclear devise that could result in a detonation of the same magnitude as Hiroshima.
To better secure the U.S.’s SNM, POGO believes that such materials required for national defense should be moved to underground or bermed facilities, which are more secure and less expensive to defend than the above-ground facilities currently used. Furthermore, any excess SNM must be reduced to a minimum.
In addition to their recommendations for consolidating SNM, Mr. Stockton and Professor von Hippel suggested a number of ways in which NGOs can help speed up the consolidation process. NGOs can, for instance, develop sources of information inside facilities, coordinate with governmental staffs and legislative committees to highlight vulnerabilities, keep decision-makers informed about investigative findings and recommended improvements, and work with the news media to apply public pressure on governments to consolidate nuclear materials.
POGO and Professor von Hippel’s paper will be published before the end of this year.
POGO Promotes Doing Business Only With Responsible Contractors
In April, POGO’s General Counsel Scott Amey testified about “Responsibility in Federal Homeland Security Contracting” before the House Committee on Homeland Security. The Department of Homeland Security (DHS) has a broad mission to reduce America’s vulnerability to terrorism, and minimize damage from terrorism and natural disasters. As a result, DHS has to be on the cutting edge of innovation, technology, and service in order to stay at least one step ahead of threats to our nation. To meet these needs, DHS contract spending has increased from $3.4 billion in fiscal year 2003 to $15.8 billion in fiscal year 2006, making it the third largest federal agency after the Department of Defense ($296 billion) and the Department of Energy ($22 billion).
Yet, DHS must balance its needs with its duty to protect the U.S. taxpayers. Unfortunately, the agency has received many critical reviews from its Inspector General and the Government Accountability Office. As contracting dollars continue to grow, so do the agency’s contracting problems.
The following are excerpts from Scott’s written testimony:
"Although many Members of Congress, media outlets, and public interest groups point fingers at the contractors, the problem is much deeper. DHS is in a vulnerable position: the agency has poor contract management policies and procedures, while at the same time it is buying infant technologies, and buying under emergency circumstances where competition is, by necessity, limited or non-existent. As a result, DHS is frequently placing all of its contracting eggs in one basket. In cases when competition is limited or non-existent, Congress, DHS contract and program officers, and agency oversight officials must place a greater emphasis on pre-award decisions and on post-award monitoring and administration. DHS must establish integrity in its buying system: its current system is plagued with improperly awarded, out-of-scope, overpriced contracts, and with contracts that produce little or no results."
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"Questions should be raised within DHS, and the government in general, when contracts are awarded to risky contractors. These include contractors that have defrauded the government or violated laws or regulations, contractors that had poor work performance during a contract, or contractors that had their contracts terminated for default. Continuing to award contracts to such contractors undermines the public’s confidence in the fair-play process, and exacerbates distrust in our government. It also results in bad deals for the agency and for the taxpayer."
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"Instances of misconduct include: false claims against the government, violations of the Anti-Kickback Act, fraud, conspiracy to launder money, retaliation against workers’ complaints, and environmental violations. DHS is shirking its responsibility to vet contractors and determine whether they are truly responsible. POGO is concerned that pre-award contractor responsibility determinations have fallen to the wayside. DHS and other federal agencies seem more concerned with awarding contracts quickly rather than ensuring the government gets the best goods or services at the best practical price.
Another problem that faces DHS is the under-utilization of the suspension and debarment system as a tool to weed out risky contractors. To be fair, the problem is not limited to DHS—all federal agencies under-use suspension and debarment against large contractors … . Overall, the government needs to re-emphasize the importance of preventing risky contractors from receiving future taxpayer dollars."
Chairman Bennie G. Thompson (D-MS), Ranking Member Peter T. King (R-NY), and the Members of the committee were engaged and interested in promoting contracting improvements to ensure that taxpayer dollars are reaching the intended programs and the victims that truly need federal assistance.
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