Yesterday, the House of Representatives overwhelmingly passed by a vote of 409 - 13 a bill designed to increase the percentage of federal contracts awarded to small businesses and limit the bundling of small projects and work orders into gigantic contracts. The White House declared their opposition to H.R. 1873 earlier this week, but stopped short of saying President Bush would veto it should it reach his desk. That's a pretty good thing since the vote in the House is more than enough to override a veto by the president.

After the House Small Business committee approved the bill on April 24, it was sent to the Oversight and Government Reform committee, where a number of the bill's provisions were scaled back or weakened. Before the bill was passed on the floor however, amendments were adopted to restore the original version approved by the Small Business committee. This version would increase the federal government small business procurement goal to 30 percent.

The Senate Small Business committee is reported to be drafting similar legislation.

In one of the more common-sense moves of the 110th Congress, the House Oversight and Government Reform Committee, Subcommittee on Government Management, Organization, and Procurement unanimously approved a bill yesterday to prevent companies who owe federal taxes from being considered for government contracts. The bill (H.R. 1870) would target companies that owe at least $2,500 and have not paid the IRS or started a payment plan within 180 days of getting an assessment.

During the mark-up, the bill's sponsor and subcommittee chairman Rep. Edolphus Towns (D-NY) offered an amendment that would help assuage concerns expressed by the Bush administration during hearings on the bill. The amendment would change the bill to incorporate the tax deliquency provisions into the regular contracting process. This change would still bar companies who owed taxes from receiving new contracts from the government, but would grant those companies due-process rights and opportunities to contest the government decision to bar them. Seems fair enough.

The bill moves now to the full House Oversight and Government Reform committee, where it may encounter opposition ($) from ranking member Rep. Tom Davis (R-VA), who apparently thinks it's alright for companies not to pay taxes.

It would be absurd to spend $10,000 to generate $1,000* in revenue. To avoid this sort of folly, organizations typically ascertain how much a new project will cost and how much revenue it will generate before they decide to implement it. Not so much for acting IRS Commissioner Kevin Brown (no link, sorry):

[In testimony before the Financial Services and General Government Subcommitte] Brown said money collected by [private collection] agencies contributed funds to the treasury IRS does not have the resources to collect.

When Durbin cited data concluding that it costs more to collect $100 using the agencies than IRS agents, Brown said the two workforces are not comparable, but added IRS is working on an cost analysis of using the private agencies that is expected to be completed by the end of 2007.

The hits just keep on coming for Reading First, one of President Bush's signature education programs. We reported last month that the program had selected the same contractor that was implementing the program to evaluate its effectiveness. This was on the heels of reports last fall that the Reading First program was using favoritism to steer program funds to certain reading programs over others.

Then, at the end of February, the Government Accountability Office released a report criticizing the lack of written guidelines to govern implementation of the program for both government officials and outside contractors - a report Rep. George Miller (D-CA) and Sen. Ted Kennedy (D-MA) were quick to comment on. Kennedy and Miller said the program had developed a "track record of bias and abuse," and that the implementation was "flawed and mismanaged."

Miller followed up the press release with a hearing in April, where John Higgins, the Inspector General at the Department of Education testified to the same conflicts of interest and mismanagement previously reported.

Among the findings of the Inspector General's report, they found the Department of Education:

1) appeared to inappropriately influence the use of certain programs and assessments;
2) failed to comply with statutory requirements and its own guidance;
3) obscured the requirements of the statute; and
4) created an environment that allowed real and perceived conflicts of interest.

Then today, Kennedy released a report providing additional details about how individuals involved in running the program at outside contractors had deep financial ties to publishers of reading materials purchased by states under the program. Yikes! According to the Kennedy report, people overseeing the implementation of the program at outside contractors were getting kick-backs from certain publishing companies whose materials and programs were being officially recommended as the tools to use under the program. Sounds eerily like the same kind of situation that caused the recent student loan scandals.

All this, of course, is unacceptable, and unfortunately has not been unusual during the Bush administration. Good thing we've returning to a robust system of oversight in Congress and that they are paying attention to important offices like the Inspectors General and GAO. We certainly won't get too far relying on the President's own personal evaluation system - the Program Assessment Rating Tool. Using the PART to review the Reading First program, the President found it to be "effective" and that it had "strong program design and good management practices." Yet another reason not to trust the PART process.

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A spokesman at the IRS announced yesterday that Deputy Commissioner Kevin Brown will become acting IRS commissioner May 4. Current Commissioner Mark Everson has accepted a position heading up the American Red Cross (see here and here for more on Everson's departure).

In much the way a senior in college decided to go to graduate school to put off a decision about what to do with their life, the IRS said Brown would only be the acting commissioner for 25 days. For him to continue beyond that time would require White House approval.

I don't know much about Kevin Brown (other than that I believe he pitched for a time for the Rangers and Dodgers and had a wicked sinker), but he has previously served as both counsel and then commissioner of the Small Business/Self-Employed Division at the IRS, which employs almost 44,000 workers and oversees the compliance programs for all individuals and small businesses. It serves 45 million taxpayers.

Brown has also served as chief of staff to Everson, and joined the IRS in 1998 as Assistant to the Commissioner. He also participated in advising the agency during the Restructuring and Reform Act of 1998.

At this point, there is no reason to believe that the White House will not approve of Brown's permanent appointment to be the IRS commissioner.

As we reported last Friuday, the House Agriculture Committee is holding a hearing tomorrow on security breaches at the Department of Agriculture. This hearing is a follow-up to reports earlier in April of personally identifiable information being contained within USDA data that is widely available on the internet. This security issue was discovered on April 13 by a user of our FedSpending.org website.

Also last Friday, Sens. Barack Obama (D-IL) and Tom Coburn (R-OK) sent a letter to USDA Secretary Mike Johanns stating that the disclosure of personally identifiable information was "improper and unacceptable." Obama and Coburn also called on USDA to provide three things by May 18:

• An assessment of the harm caused by disclosing Social Security numbers and a report on utilization of the credit monitoring service;
• A report on what is being done to ensure that data security problems are fixed; and
• A detailed plan and timeline for adopting a new unique identifier without disclosing personally identifiable information.

OMB Watch also requested the third item on the above list from USDA on April 16, and I'm guessing there will be a few Representatives at the House hearing tomorrow who have some questions that will need to be answered as well. Here's hoping for USDA's sake that they have some answers ready to go.