Should SIGAR Have Suspension and Debarment Power?

From time to time, POGO highlights the excellent work being done by the Special Inspector General for Afghanistan Reconstruction (SIGAR) to curb fraud, waste, and abuse in the U.S. reconstruction mission in Afghanistan—now in its twelfth year and closing in on $100 billion in total cost. As we pointed out last year, the appointment of John F. Sopkoto head the watchdog agency seems to have infused SIGAR with renewed vigor, as evidenced by an increase in inspections and audits.

But SIGAR wants to do more. We blogged in October about SIGAR seeking the authority to suspend or debar companies and individuals with ties to terrorist groups.

It seems that SIGAR’s current options for dealing with this problem—issuing government-wide warnings about these companies and individuals, and making referrals to Pentagon suspension and debarment officials—are not having much of an impact. In December 2012, a bi-partisan group of Senators sent an urgent letter to the Army warning that, due to a growing backlog of SIGAR suspension and debarment referrals before the Army Suspension and Debarment Official (60 as of November), companies and individuals suspected of actively supporting terrorism in Afghanistan are still receiving taxpayer money. According to the Senate letter, the Department of Defense (DoD) set a goal of completing suspension and debarment referrals from Inspectors General within 30 days, but according to SIGAR’s October 2012 quarterly report, it takes federal agencies an average of more than 10 times that long (323 days) to act on its referrals.

Two weeks ago, Army Secretary John McHugh responded to the Senate. Secretary McHugh blamed the backlog on SIGAR, claiming it has not provided enough evidence to support debarment. He cites Subpart 9.406 of the Federal Acquisition Regulation (FAR), which requires “a preponderance” of evidence in order to debar. What Secretary McHugh’s letter does not explain, however, is whether SIGAR’s referrals provided enough evidence to support suspension, for which the FAR imposes a much lower burden of proof (“adequate evidence”). We hope the Senate presses the Army on this specific question. Could there be other reasons the Army is reluctant to exclude these particular companies and individuals from contracting?

POGO supports improvements to the suspension and debarment system that would reduce the amount of time it takes agencies to act on referrals. In recent years, we have seen outrageous delays between the incident prompting the referral and the final decision by the suspension and debarment official. The Deepwater Horizon explosion and oil spill is a prime example: the disaster occurred in April 2010, but the Environmental Protection Agency didn’t suspend BP until November 2012.

As Special Inspector General Sopko told Congress last year, time is often of the essence in a suspension or debarment proceeding, especially in an unstable environment like Afghanistan. In November 2011, SIGAR submitted to the Office of Management and Budget (OMB) a draft regulation that would grant SIGAR suspension and debarment power. Sopko’s rationale is persuasive:

As the agency with the largest investigations and audit contingent currently in Afghanistan, SIGAR is unique in that it has the most extensive, cross-agency subject matter expertise available to investigate and address fraud and poor performance by contractors….Numerous other federal agencies without the kind of investigative and audit expertise maintained by SIGAR have obtained OMB-authorized suspension and debarment authority.

OMB has not yet taken action on SIGAR’s request.

In the meantime, some in Congress are trying to strengthen SIGAR in other ways. For example, Senator Jeanne Shaheen (D-N.H.), one of the signers of the December 2012 letter to the Army, has sponsored legislation that would require agencies to explain to Congress why they refuse to implement, or only partially concur with, SIGAR recommendations to seek reimbursement for failure by a contractor or subcontractor to successfully complete a contract.