Federal Budget & Tax

Federal Budget & Tax: News Blog Background

Tuesday, May 27, 2008

House Launches "Fighting Contracting Abuse" Caucus

CongressDaily is reporting ($) that a few members of the House of Representatives are forming the "Smart Contracting Caucus" to pursue what Rep. Tom Davis (R-VA) called "thoughtful federal procurement reform." But Dan Friedman at CongressDaily isn't buying the spin:

Davis was a contracting lawyer and is the House's top backer of government contractors concentrated in his suburban Virginia district. He has long pushed to make contracting with federal agencies simpler for businesses. Since the 2006 election, Davis has negotiated with House Oversight and Government Reform Chairman Henry Waxman and other Democrats to remove provisions from several House-passed contracting reform bills after they drew particularly vocal industry opposition. With Davis leaving Congress this year, the caucus appears in part an effort to institutionalize his role.

While I like that folks in Congress are paying more attention to the horrific problems we have in the federal procurement system (here's the latest), I'm not sure if Davis is the best person to be heading up this caucus. Considering his opposition at one point to legislation to prevent companies that owe federal taxes from being considered for government contracts, his original support of a spending transparency bill that did not disclose contracts data, and his support of the largest corporations regardless of whether they have broken federal contracting laws, it's probably good he won't be around next year. If he was, they would probably have to rename it the "Fighting Contractor Abuse" Caucus.

Posted by Adam Hughes, 07:32:38 PM

Thursday, May 22, 2008

Condition of State Budgets Continue to Decline

The state of state budgets continues to deteriorate around the country. The Center on Budget and Policy Priorities released another update yesterday to their increasingly disturbing analysis, which now shows that 31 states are anticipating budget problems in 2009, with 27 projecting a budget shortfall. We continue to reiterate that this is pretty bad news as state budgets are far less flexible than the federal budget and usually are legally prohibited from running a deficit. From the CBPP update:

31 states anticipate budget problems. Of those:

27 states and the District of Columbia faced or are facing $47 billion in combined '09 budget shortfalls. Arkansas and Michigan join this list.

2 states face '09 deficits, but have released no further information. (Connecticut joins this list. Louisiana and Michigan leave.)

2 other states project budget gaps for 2010 and beyond. (Connecticut leaves this list.)

CBPP: 27 STATES FACE TOTAL BUDGET SHORTFALL OF AT LEAST $47 BILLION IN 2009

Posted by Adam Hughes, 11:27:53 AM

Wednesday, May 21, 2008

Senate Restricting Public Access to Contractor Data

The U.S. Senate is moving to restrict public access to a new contractor misconduct database, part of a new proposal being spearheaded by the Project on Government Oversight and Sen. Claire McCaskill (D-MO). Apparently there is bipartisan objection to the proposal within the Homeland Security and Governmental Affairs Committee. Scott Amey at POGO has the rundown:

Now, I can see, at worst, allowing certain information to be stored in a "government only" section of the database. But throwing a blanket of secrecy over the entire database is absurd. A large percentage of the cases included in the proposed responsibility databases are already publicly available in SEC filings and DOJ or agency press releases.

This doesn't sit well with POGO and an eclectic list of 32 other groups that support an open and transparent government. Hopefully, Congress will decide that the public deserves to see scofflaws' rap sheets. The public should have access to a government sponsored comprehensive list of contractors (similar to POGO's Federal Contractor Misconduct Database) that defrauded the government, violated laws and regulations, had poor work performance, or had their contracts terminated for default.

Also see this good article from this morning on the issue from Robert Brodsky at GovExec.com.

Posted by Adam Hughes, 05:37:16 PM

Jackson May Not Have Been Only Bad Apple at HUD

Carol Leonnig at the Washington Post wrote a great article over the weekend that gets further into the weeds on contracting problems at the Department of Housing and Urban Development under former Sec. Jackson. Leonnig profiles three small businesses that received huge jumps in the size of federal contracts they received over the last five or so years, often times despite objections of career contracting officers. It appears awarding contracts as political favors might have extended well beyond Jackson to many other high ranking officials at HUD:

Federal investigators are still sorting through HUD contract awards to friends of Secretary Alphonso Jackson, who resigned last month amid a criminal probe. But some career staff members and agency observers say problems in the agency's contracting process run much deeper than Jackson and involve officials who promoted certain companies while rebuffing concerns about their performance and qualifications.

The three companies profiled began as very small operations with little or no federal contracting experience. Harrington, Moran and Barksdale Inc. (HMBI) had no federal contracts until FY 2004, when they received over $71 million. During the Bush administration, HMBI was received almost $223 million in federal contracts, 80 percent of which were awarded without full and open competition. The other two companies, National Housing Group which received almost $52 million) and Drayton, Drayton, and Lamar, Inc. (which has been awarded about $32.5 million) have even worse records for competition. The National Housing Group received 92.2 percent of its funding without competition while Drayton, Drayton, and Lamar comes in at an astounding 98.6 perent without competition.

What is truly troubling about this story is that the career contracting employees at HUD who attempted to do the right thing on behalf of taxpayers were moved out of their positions after they raised objections, cited evidence of wrongdoing, or claimed political manipulation. In one case, not only were the claims of the 33-year veteran contract officer vindicated by subsequent investigations, but the company in question has had a principal employee charged with fraud related to the contract. The two contract officers who are profiled in the Post story retired shortly after being moved into policy positions.

HUD officials deny any wrongdoing in any of the cases cited in the Post article, instead blaming the contractors who they repeatedly attempted to favor through sole-source contract awards. HUD spokesman Jereon Brown contributed quite an understatement when he said "not all contractors perform as well as expected." As we have advocated before many times, what will help deter these types of instances is access to data on contractor performance and copies of the actual contract. Then we'll be able to judge for ourselves how well contractors are performing and how wise an investment various federal contracts are.

Wash Post: HUD Repeatedly Dismissed Staff Concerns About Contracts

Posted by Adam Hughes, 10:50:55 AM

Thursday, May 15, 2008

Best Spin Ever: Doan Fought for Accountability!

When I posted at the end of April that the book had closed on Lurita Doan, former head of the General Services Administration, (GSA) apparently I was wrong. She has resurfaced in interviews in GovExec magazine, on Federal News Radio and most recently in this border-line ludicrous column in Federal Computer Week by Neal Fox, the former assistant commissioner of acquisition at the GSA.

Now I've come across some interesting spin in Washington in my time here, but I think this one has to take the cake. There are too many strange, misleading, and frustratingly vague statements (e.g. "Some people who had backed IGs began to have doubts.") in Fox's article to jump into all of them (Beverley Lumpkin over at POGO has a good rundown refuting many of them that is worth reading). But the overall tone of the piece implies that IG offices are a danger to good government and need to be reigned in. This perspective needs to be soundly dismissed.

Fox's main point seems to be that a thirsting for power and arrogance at the IGs office was the main issue at GSA, not any particular issue or problem they were investigating (and there were plenty). Fox's point is mind-numbingly ironic considering many of the actions the IGs office was investigating can not be seen as anything else than a power grab by a pretty arrogant Ms. Doan herself (see strong-arming contracting officers and side-stepping contracting protocols to help friends). Worst of all, Doan's unprecedented actions to attempt to cut the IG office's budget and outsource its contracting oversight responsibilities to, of all places, private contractors, was a deliberate attempt to keep prying eyes away from her attempts to operate on her own outside of federal laws and regulations.

I'm still hopeful, as I think POGO was at first glance, that vague assertions and unsubstantiated ramblings like those contained in Fox's article won't influence anyone (that would be a shame). In these times of poor oversight and significant corruption and incompetence in the federal government, we need strong IG offices more than ever to help develop a more effective and accountable government.

Posted by Adam Hughes, 12:37:26 PM

Wednesday, May 14, 2008

Ranks of Contracting Officers Grow, But Not Enough

Stephen Barr, who writes the Federal Diary column for the Washington Post, wrote on an interesting topic last week - the growth in federal contracting officers (COs) under President Bush.

Barr reported that the number of COs has increased 6.8 percent since President Bush took office, according to federal statistics. Barr also was correct in pointing out that there are concerns among many in Washington (both inside Congress and out) that despite these increases, there are still far too few COs and they receive sub par training and support in doing their jobs.

One of the most shocking things was that federal officials don't even know how many COs would be appropriate to have:

But how many contracting officers the government actually needs has not been determined, despite efforts by federal agencies, the Office of Personnel Management and the OMB over the past two years to develop plans for hiring and training contracting officers and specialists.

"We are still working real hard with OPM and the departments to try to figure out what the right number is," said Paul A. Denett, an Office of Management and Budget official in charge of government procurement policy. For his part, Denett added, "I believe we need to increase the hiring even more."

Let me give Mr. Denett a hint. You definitely need to hire more. While the COs workforce has increased 6.8 percent since Bush took office, federal contracting dollars have increased close to 100 percent - from $219.8 billion in FY 2001 to $430.1 billion in FY 2007. Those facts alone should be pushing the government to hire and better train more employees to oversee an immense area of discretionary spending by the federal government. That, plus the wide-ranging and seemingly continuous reports of waste, fraud, and abuse in federal contracting makes it almost shameful something hasn't been done already.

Posted by Adam Hughes, 02:58:17 PM

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