That's the objection coming from House Republicans to Rep. Carolyn Maloney's (D-NY) contracting bill (HR 3033) that would debar federal contractors if they are found to have violated federal contracting rules or laws.

"Right now, there is nothing stopping a fraudulent contractor from bouncing from federal agency to federal agency, fleecing U.S. taxpayers the whole way," Maloney said. "Congress can and should do more to fortify the federal procurement system, and show the door to contractors lining their pockets at the expense of hardworking taxpayers."

But according to an unnamed GOP staffer, it "would place many of the country's largest and most influential contractors at risk of losing out on future government work." [direct quotation of story, not staffer - ed.].

So, rather than force the country's largest and most influential(!) contractors to comply with federal contracting rules, the bill's opponents would prefer that the pillaging of federal resources continue virtually unabated. You see, Boeing, which "has been found guilty or entered into settlements for violations of numerous federal laws" and received some $22 billion in federal contracts in 2007, should be excused from dealing ethically with the government because, well, I'll let Rep. Tom Davis (R-VA) explain:

"By approving this bill, the committee sanctioned the possible elimination of Boeing and other vendors from the government marketplace," Davis said. "Of course, I support the appropriate use of the debarment process to prevent bad actors from getting federal contracts. But it always has been a means to protect the government, not to punish businesses."

So there are some instances in which debarment is not punishment? "Violator-of-Numerous-Federal-Laws" Boeing is not a bad actor? Help me out here, Congressman.

House Oversight and Government Reform Committee chair Henry Waxman (D-CA) has sent a letter^* to Attorney General Michael Mukasey asking why federal contracting rules have been changed such that they would "exempt overseas contracts from a requirement that the contractor detect and prevent fraud and report it to the government."

AP:

The United States has spent more than $102 billion over the last five years to help rebuild Iraq and Afghanistan. In that time, the Justice Department has uncovered at least $14 million in contract bribes in those two nations alone.

"Preventing fraud by contractors overseas should be a high priority," Democrats wrote in letters sent to the White House Office of Management and Budget and four other executive agencies. "Instead, the exemption for contracts to be performed overseas appears to have been inserted in the rule late in the process and against the wishes of the Department of Justice, which raises serious questions as to why and how such a policy was developed."

The letters were signed by House Oversight Chairman Henry Waxman of California and committee members Reps. Edolphus Towns of New York and Peter Welch of Vermont. Welch, who first called for the investigation, vowed "to get to the bottom of this."

"Who snuck this in at the eleventh hour and why?" Welch said in a statement. "No contractor should be given a free ride to defraud taxpayers, at home or abroad."

And Big Contractor (i.e. the lobby that represents government contractors - Professional Services Council) is pretty clear that this loophole is intended to remove accountability from contractors doing overseas work.

Without the exemption, [executive vice president of the Professional Services Council] Chvotkin said, U.S. firms that subcontract out work to foreign businesses could be unfairly held liable for abuse that they have little or no way of preventing.

Indeed. Chvotkin makes a good point. Contractors have no way of preventing abuse of federal funds.

Tom Shoop, blogging over at FedBlog, made an excellent point about the NY Times coverage last Friday of an overlooked hearing in the Ways and Means Oversight Subcommittee. The Times headline continues to blacken the already quite black eye the IRS had developed over the private tax collection program: Taxpayer Advocate Says Outsourcing at I.R.S. Is Inept.

Let's hope Tom is correct that this type of mainstream attention will signal the beginning of the end of the wasteful and dangerous program.

hat tip: More Bad Press for IRS Outsourcing

Last week, we noted that Sen. John McCain (R-AZ) played a role in killing the Air Force's deal with Boeing to provide tanker planes. Citing corruption in the original bidding process as the reason for his intervention into the deal, McCain said:

All I asked for in this situation was a fair competition...I never weighed in for or against anybody that competed for the contract. All I asked for was a fair process. And the facts are that I never showed any bias in any way against anybody — except for the taxpayer.

Hooray for fairness in contracting! A noble effort, indeed. Well, it would be, except that a number of McCain's "top campaign advisers" had lobbied for the firm - EADS - that won the contract after the bidding procedures were revised.

McCain finance chairman Thomas G. Loeffler and Susan E. Nelson, who left Loeffler's lobbying firm to be McCain's finance director, both began lobbying for Airbus's parent company in 2007, Senate records show. William L. Ball III, a former secretary of the Navy and frequent McCain surrogate on the trail, also lobbied for Airbus, as did John Green, who recently took a leave from Ogilvy Public Relations to serve as McCain's legislative liaison.

It is not clear what specifically the McCain campaign advisers did for Airbus. Lobbying registration documents list only "initiatives and interests regarding the KC-30 Aerial Refueling Tanker Program." Loeffler did not respond to e-mail requests for an interview.

McCain spokeswoman Jill Hazelbaker said the senator from Arizona and his advisers have done "nothing improper" in the tanker deal. "John McCain was never personally lobbied on this issue," she said.

EADS' interest in the tanker deal is evident in the political contributions of its employees. From 2004 to 2006, donations by its employees jumped from $42,500 to $141,931, according to an analysis by the nonpartisan Center for Responsive Politics. So far this election cycle, company employees have donated $120,350. Of that, McCain's presidential campaign has received $14,000, more than any other member of Congress this election cycle.

It may very well be that no special treatment was afforded EADS by McCain. The moral of this story, however, is that when it comes to government contracting, the devil(s) is (are) in the details. In a world in which bidding rules are not complex and uneven, lobbyists do not become employees of Senators (and vice versa), and policy makers abstain from taking money from potential contractors, awarding contracts to the "best" firm may be the norm, but that's not the world we live in. And when billions of dollars of federal funds are in the offing, only careful oversight and transparency will blunt the effects of arrangements like McCain's

The Boston Globe:

In letters to the Internal Revenue Service, the Small Business Administration, and the Labor Department, [House Oversight Committee Chairman Henry] Waxman, Democrat of California, questioned Blackwater's classification of its workers as independent contractors instead of employees. That designation, which the government has questioned in the past, allowed the company to obtain $144 million in contracts set aside for small businesses and avoid paying as much as $50 million in withholding taxes under State Department contracts, he said.

Blackwater's classification scheme represents about 15% of the $1.25 billion it has received from the government since 2000.

Contracts to Blackwater USA at FedSpending.org through Q2 2007.