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Alice Lipowicz:
Hello everyone, and welcome to today's forum. This is your chance to ask me questions and my chance to hear from you, so let's get started.
Rep. Henry Waxman, the new Democratic chairman of the House Committee on Oversight and Government Reform, has held several hearings on alleged waste and abuse in federal contracts. He has a list of dozens of "wasteful" contracts on his website and he is picking them apart, one by one. Last month, it was Homeland Security's Deepwater and SBI-Net contracts that got a workout in front of the committee. One of the targets was Booz Allen; Waxman's memo at the hearing said Booz Allen has a conflict of interest working as a consultant to the procurement office on SBI-Net while also working as a sub to Boeing on an Air Force contract.
I have to tell you, I've been getting lots of calls and emails on this, and people are divided. Some people think there are significant problems here that need to be rooted out, while others say it's business as usual. What do you think? Do you think there's a significant conflict of interest here? What is your experience with DHS and its handling of "organizational conflicts of interest?" Please write in and talk to me.
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John Dunham GA:Every time an agency outsources and uses contractors, the cost seems to ultimately increase and some duties are returned to the government workforce. Has outsource contracting been examined for the true long-term effects?
Staff writer Alice Lipowicz:Hello, and thank you for writing. Good point about outsourcing. To answer your question, I'm not aware of any comprehensive bipartisan study of the long-term impact of outsourcing. Meanwhile, state and local government outsourcing is supposed to rise to $20 billion by 2011.
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Washington DC:How can the Government hope get IT projects successfully delivered on time and on budget if companies continue to incentivize their project managers to extend and build on the contracts?
Staff writer Alice Lipowicz:
Welcome to the forum. Good question. You've got government on the one hand trying to get the job done on time and on budget, and contractors on the other hand trying to get more money and more work.
I think it is in the nature of capitalism for the customer buying the service to keep costs down, and the vendor selling the service to maximize profits. I haven't seen how these incentives to contract project managers are structured, but I assume the goal is to foster entrepreneurialism and to motivate improvements, new ideas and innovations. If those new ideas are accepted and considered useful by the government contracting office--and possibly result in greater efficiencies and long-term savings--then there's a potential benefit to the taxpayers if the ideas are utilized to extend and build upon the original contract. If the incentives lead to "wasteful spending," however...of course I agree that is a poor outcome for taxpayers.
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Washington:Why are you whipping up anxiety about oversight. There's been little for six years. This is a return to normal. Further, the government always--in GAO reports, in hearings--takes 90 percent of the heat in these matters, deservedly. And no one can point to a solid blow on industry--some embarassment, maybe, but no lost business, no contract terminations. Just a warranted dent in overblown reputations. But you are beating the drum a little too hard, don't you think?
Staff writer Alice Lipowicz:Interesting comment about little being changed in six years. As a news reporter, I am fascinated by the political dynamics of this situation and I wonder how far the new Democratic majority in Congress will go to increase oversight. It's true that there has been no loss of business yet, but we're only in the third month of Democratic majority here. Also, as I mentioned previously, some people think Washington Technology is beating the drum pretty hard....while many others think we've barely barely made any noise. I hear from both sides on that.
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Virginia:Why is the focus always on contractors. Isn't a federal manager usually where the buck should stop?
Staff writer Alice Lipowicz:
Hello and welcome. Good point. You're right that federal managers bear some responsibility. There has been some media coverage on this, including stories about how difficult it is to hire federal procurement managers and how difficult it is to retain them. Many of these federal managers are career employees.
You make a good point about whether we ought to be scrutinizing the federal managers more closely. In my experience, when there is a problem, journalists and other investigators tend to "follow the money" and see who is benefiting from the situation. If a federal manager makes a low salary and a contractor gets a multimillion-dollar contract, there may be a tendency to look at the contractor first.
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Dan:
It seems that small businesses cannot get a fair shot at competing for federal contracts. There are three major reasons for this:
• Fewer set-aside contracts. • Actions and lack of management of bad contracting officers. • Very little over-sight by federal agencies.
In addition, requests for contract debriefings and Freedom of Information Act (FOIA) are routinely ignored. Contracting Officers (CO) routinely break FAR rules and regulations. High-level military and Federal agency officials routinely work a few years, resign and accept positions with the very firms they gave business to. As everybody knows, firms like Booz, Allen & Hamilton, routinely utilize this practice to reward these officials. In short, nobody is paying attention and/or enforcing the law.
8(a) and woman-owned business set-aside contracts are at an all-time low. The SDB and veteran-owned business set-asides are non-existent (but viewing how we treat our injured veterans, I guess this is par for course).
To make matters worst, 8(a), SDB and Veteran-owned businesses’ rates, are normally at least 25% better then larger firms. The product is normally better, because the top-tier management of smaller firms are more inclined to better manage these contracts and interact more with the customers.
America taxpayers are being fleeced and most small businesses will not complain for fear of reprisals (Nobody wants to be blacklisted). Being that there are no legitimate avenue for small firms to seek help, most just grin and bear it. Americans could save billions of tax-payer dollars if Washington bureaucrats actually enforced the present rules and regulations on the books.
My question is: Is congress going to actually do something about this, and if so, what?
Staff writer Alice Lipowicz:Thank you for your comments. I think Waxman's committee is seriously looking at these practices; however, they are looking at the largest contracts at the moment. If you have firsthand examples of these practices, you might want to present the evidence to Waxman's committee. Or, present or submit the evidence to me and I will look at it. If lots of people are ignoring the FAR it seems like that's going too far and needs to be scrutinized.
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Wash DC:Oversight Committees are often "forced" to investigate by either media pressure or a lobby interest. E.g. the Senate HSGAC has done nothing address why DHS has been dysfunctional and wateful for so long. The Waxman Committee is another example ... they took two high $ cost items and one lobbyist pressure item. Seems the only true and honest oversight is the media.
Staff writer Alice Lipowicz:
Thank you for the comment on the media. However, the media is only as good as the contributions that come in from the public. If stuff is going on that needs to be written about and held up to public scrutiny, we need to know about it before we can investigate it. So keep those emails coming.
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New York:From where I sit, I see increased outsourcing and large government contracts as steamrollers that perhaps can be slowed but not not halted. Everyone pays lip service to contractor oversight, but we know that's not where the government spends its money, because oversight officials don't contribute to congressional campaigns—contractors do. So my question is this, what actual reforms are Waxman and others likely to legislate?
Staff writer Alice Lipowicz:
Thank you for your note. I've had a number of experts say Waxman's Clean Contracting Act is likely to pass this year. Where exactly Waxman will make his mark in terms of what reforms will pass? It's too early to tell.
You might want to look at Angela Styles' comments in my recent story.
Waxman in early February was getting a lot of attention for his hearing, and then, last week, the Walter Reed hospital scandal took over the news cycle. So media attention has gone off outsourcing/federal contracting at the moment.
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Pam, Nevada:I believe outsourcing is good for competition, innovation and the U.S. economy. However, I see no funds being expended for training overseers of outsourcing. Is there any chance of a comprehensive training for the workforce?
Staff writer Alice Lipowicz:Thank you for your note. I've seen some commentaries on this, but it will take a little research to look into this further. Please send me an email and I will respond.
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Dustoff WV:What are your impressions with Senate Bill 680 as sponsered by Ms. Collins entitles "Accountability in Government Contracting Act of 2007"? It intends to limit task orders to 100M and increase the number of axquisition professionals. In addition protests are allowed on any award over 5M, debriefs are always allowed and ratings of the offeers and reasons for selection will be posted to FedBizOps.
Staff writer Alice Lipowicz:Welcome. Most of it is uncontroversial, while some provisions, especially the ones allowing for more protests, are controversial.
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Richard West, Florida:What is Waxman's true motive in his accusations against Governmnet Contractors? Is it truely to search out fraud, waste and abuse or is he doing it for political gain and fame?
Staff writer Alice Lipowicz:Welcome to the forum. I think it's a little early to try to judge his motives.
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Dustoff WV:Is extending the "Whistle Blower" act to contractors opening a new series of problems, or creating a more open and visible contracting community?
Staff writer Alice Lipowicz:Welcome to the forum. That's a very good question. I haven't formed an opinion on this yet. What do the participants think about this?
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Larry - Malibu, California:I saw the reference to Waxman's website and naming the top contracts he is investigating - do you have that website handy?
Staff writer Alice Lipowicz:Welcome to the forum. Here is the URL for Waxman's database of "wasteful" contracts: http://oversight.house.gov/dollarsnotsense /
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Dong Shen, TX:Not sure about the benefit of any analysis of long-term results of outsourcing contract, because in order to comapre apple to apple, you have to do a similar analysis for long term results of Not Outsourcing, and in almost every case, the cost will increase, too. So, you will never know which is better - outsourcing or not
Staff writer Alice Lipowicz:Thank you for your comment.
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Phil Zimmermann-California:I would like to share my recent DHS experience. I founded GeoSphere Systems to develop a monitoring system for large structures such as pipelines and RR lines. I saw an application with border fences and submitted it to Science & Technology at DHS and got a letter saying that my technology was in a 30 day review cycle. On day 40, a lady from DHS called me at 6:30 AM and proceeded to berate me for submitting a technology they had not asked for. I was quite stunned to say the least. Perhaps, Waxman is moving in the right direction.
Staff writer Alice Lipowicz:Thank you for your input. I'd like to hear more about this.
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Small Business in Reston, VA:Hi Alice. We think Congressman Waxman is on the right track scrutinizing LSI's. With the continued aging and reduction of the federal acquisition workforce, we have seen a trend of what we think is the privatization of the federal procurement process in many agencies. If this is true, the issues of fair opportunity, bundling, competition and COI become increasingly important. Thanks.
Staff writer Alice Lipowicz:Thank you for your comment.
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Virginia:Do you believe outsourcing is more expensive? (I think I know better.)
Staff writer Alice Lipowicz:Thank you for your question. I don't have an opinion on this; sometimes it is, sometimes it isn't.
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VA:How many government agencies do you believe need an acquisition arm? Under the new spirit of Enterprise Architecture doesn't it make sense to consolidate some of that - organizationally and procedurally? How many acquisition systems does it take to serve the taxpayer?
Staff writer Alice Lipowicz:Thank you for your note. Sure, consolidation makes sense. At DHS they consolidated 21 agencies into eight procurement offices, I believe. I need more time to come up with a fuller answer but you, or anyone else, is invited to offer their opinions on this as well.
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Spotsylvania, VA:Many Washington law firms are announcing the formation of congressional oversight management teams to assist companies in “preparing clients for the diverse challenges that lie ahead” – with this in mind what ramifications or complications might companies expect? Will increased oversight be a boom to law firms?
Staff writer Alice Lipowicz:Thank you for your note. I suspect there will be some increased business. If you've been in Washington long enough (I've been here more than 15 years) it becomes clear that any change in administration (Congress or the executive/judicial branches) seems to lead to a round of more consulting, lobbying, advocacy and "advisory" services to adjust to the changes.
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Oakton, VA:Isn't it true that contractors really don't drive the train in acquisition, rather bureacrats do?
Staff writer Alice Lipowicz:Welcome. You forgot to mention lawmakers and politicans. They often "drive the train" in Washington, in acquisition and everything else.
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Dallas,TX:Will Waxman's inquiry also delve into the government side of administering contracts which in many casees actually obstruct contractor performance especially as the government administrators change and fail to understand the original contract?
Staff writer Alice Lipowicz:Welcome. I certainly hope he looks at every relevant fact when examining and investigating alleged fraud and abuse. If you know of a concrete example of such an "obstruction" please send it over.
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Moderator:
We have a bevy of questions still in the queue, so we are going to extend today's question and answer past noon so that Alice can answer these.
However, we won't be able to accept additional questions after noon.
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Mike, VA:All the corruption I have seen in acquisition involves government employees trying to get their friends and colleagues hired, or channel work to their acquaintances. Congress is widely perceived to behave in the same manner at budget time. I find most career government employees know very little of the private sector and capitalism. They seem to view the budget as a kind of trough where the powerful feed and direct feed. And somehow that is viewed as good for the economy. Do you see federal employee attitudes and ignorance as a source of acuisition problems?
Staff writer Alice Lipowicz:Welcome to the forum. In Washington, the federal career employees are pretty low on the totem pole, in terms of the power they have to do things and effect change. It is certainly possible that an employee can have a negative effect on a particular contract, but it is hard to say whether this is widespread and systemic. What I hear more often is that there are far too few acquisition employees to perform effective oversight.
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MPM, Reston:Isn't there a government manager where the buck should stop in all the program failures? Can't decent managers also stand up to COngress with facts when Congress is a little out of line?
Staff writer Alice Lipowicz:
Welcome to the forum. There has been some talk about strengthening management in general; for example, at DHS, there is legislation to strengthen the undersecretary for management position, who oversees procurement management as well as everything else.
As for the idea of a low-level manager "standing up to Congress"....well, not too many people are willing and able to do that effectively. Say what you want about members of Congress, they are all expert politicians and public speakers who know how to communicate their messages effectively.
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Aldie, Virginia:Congressman Waxman's initiative seems almost identical to the one he introduced in the last Congress. That one went exactly nowhere. Is there any resonable expectation that this one will succeed where the first one failed?
Staff writer Alice Lipowicz:Hi, and welcome. Of course, the big change is that Democratics (since the November 2006 elections) are now the majority party in Congress. That means Democrats control the legislative agenda and, if the Democratic leadership chooses to do so, they can put Waxman's legislation up for a vote and probably guide it through to passage. They did not have that power when the Republicans were the majority party. The majority party generally gets to decide which legislation comes to the floor for a vote.
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Virginia:Is the federal career track that takes few people in at mid-career part of the federal management problem? In the private sector (real world) people make their own career and move around. This is increasingly true and keeps the economy nimble. Should the feds start ditching the career track to improve management?
Staff writer Alice Lipowicz:Thank you for your note. I have seen a number of commentaries on this topic and the consensus seems to be that overall federal management and administration is facing some major challenges at the moment.
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Fred:Has Waxman's staff given (or could you find out) what his " legislative plan of attack" looks like?
Staff writer Alice Lipowicz:Welcome to the forum. Anyone who is interested in this answer please send me an email (alipowicz@1105govinfo.com). It will take me some more research to formulate an opinion on this.
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MM, Reston:I have to say the government acquisition community could do with fewer more highly skilled people. I also think that federal employee compensation is not much worse than like-skilled people in the private sector. Am I wrong? I am private sector. i'd take a pay cut for their benefits, especially vacation. (Forget job security.)
Staff writer Alice Lipowicz:Thank you for your comment. Are you saying there are too many government acquisition experts out there?
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Wash DC:Some contractors are so entrenched they act as a shadow government within an agency. Of course they and their lackey government sponsors should have their feet held to the fire. They are supposed to be doing activities in the interests of taxpayrs. Its not political. Why not hold them accountable?
Staff writer Alice Lipowicz:Why not indeed? Thank you for your comments.
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Reston, VA:It seems that COI can be a large potential issue for LSI's these days since in many cases they perform purchasing, management and oversight functions on these programs for their federal clients. Sometimes it's hard to see who is keeping the taxpayer's interests in mind since commercial contracting rules and private entity goals differ from federal rules and federal agency goals. Comment?
Staff writer Alice Lipowicz:Thank you. I'm getting a lot of commentary on COI's coming in, but I'm hearing both sides. Some people think this is a major problem, other people say it's nothing new. It would be helpful to have some specific examples of COIs that are considered questionable and/or problematic.
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McLean, Virginia:I've heard the charge that there has been little or no oversight for the past six years. Is this a true statement? I am not aware of DCAA being disbanded? Does this charge come more from the increase in GSA schedule work and COTS. I think this goes to the heart of your topic. Is this a political charge or are their metrics supporting this charge.
Staff writer Alice Lipowicz:Thank you for your note. It's an interesting question and I have not seen metrics on this.
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Washington:What is Congress planning to do to eliminate the unfair advantage that Alaska Native Corporations have since they are winning sizable government contracts (well beyond the small business criteria) without competition. How can the government justify this procurement policy without competition to assure the taxpayer that government is operating as efficiently as humanly possible?
Staff writer Alice Lipowicz:Welcome to the forum. I believe there were some developments on this issue in 2006; I would need to research further and get back to you, though.
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Herndon, Virginia:
If I understand one of the provisions of the Clean Contracting Act, it would require every agency to spend an amount equal to at least 1 percent of its procurement budget on contract oversight.
At first glance, DOD seems to already be spending that much or more given the combined budgets of DCMA, DCAA and the investigative offices. The civilian agencies spend much less than that on contract oversight, but they also tend to let much smaller contracts. Would this put the emphasis in the wrong place?
Staff writer Alice Lipowicz:Welcome to the forum. The question is, is the 1 percent requirement putting the emphasis on the wrong place? I think the goal of the requirement is to ensure that the agencies are dedicating enough resources to oversight. If the 1 percent requirement does not help them meet that goal—if it creates tons of new paperwork, for example—then it might be the wrong emphasis as you suggest.
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Dustoff WV:I have witnessed awards to small businesses that are essentially invoice passers, but have special status (i.e. set aside, Alaskan Native owned, etc.). This seems to be an abuse of the system as well. Recently I witnessed a 563 Million Dollar task order awarded to a small business. Isn't that an oxymoron ? .... A small business with a contract over 1/2 billion dollars ? Under Senate Bill 680 Prime contrractors will not be allowed to have more than 65% subcontracted. Is this a legitimate goal ?
Staff writer Alice Lipowicz:
Good questions. Was this a DHS task order? I'd like to hear more about it. As for the 65 percent subcontracting requirement? I don't have an opinion on that yet.
Anyone else have an opinion on it? Please write it in an e-mail (alipowicz@1105govinfo.com) and send it over.
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Falls Church,VA:I'm not so sure Virginia meant Procurement Managers, though that seems to be the focus. It's true that Contracting professionals (Series 1102) are in short supply but their COR/COTR colleagues are (mostly) ignored in the dialogue. These are the folks with some actual subject matter expertise and the CO's rely on them - that is, where they exist. The most recent Reform panel completely ignored them.
Staff writer Alice Lipowicz:Very interesting point.
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Washington, DC:Contractors have to receive approval from the Department of State (DoS) to work abroad. They say, you can do this and not this, or do this. In addition, contractors must get approval to bring in anything “military”, from guns to night vision goggles. I believe that these are important regulations but the approval process usually takes anywhere from months to years. All of these regulations take place through the International Traffic in Arms Regulation (ITAR) through DoS. Would you comment on what role this lengthy approval process might play in hampering contractor efficiency? It seems to go against DoS interests, especially since contractors are play an integral support role where US forces are on the ground.
Staff writer Alice Lipowicz:Thank you for your comment. Wow, that approval process does seem to be onerous. I apologize; I'm not that familiar with the DoS contracting in Iraq so I'll have to defer comment on this at the moment.
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Dallas,TX:COTS products - many times they can be used but the government wants expensive and unnecessary customization if they used it correctly. Will the inquiry extend to why government project managers waste money this way? Many commercial houses would bid but don't want to support custom work.
Staff writer Alice Lipowicz:Welcome to the forum. Good question. If there's a huge waste of money going on, Congress should look at it. How much "waste" are we talking about here?
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Washington, DC:Of MEJA or UCMJ, which do you think is the best way to take contractors who have violated laws to court? Is one or the other more constitutional?
Staff writer Alice Lipowicz:Welcome. I apologize; I'm not familiar with this debate.
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Washington, DC:What role do you envision for the private security sector side-by-side with international and governmental organizations (e.g. UN) in future peace and stability operations?
Staff writer Alice Lipowicz:Welcome, and thank you for your question. I haven't formed an opinion on this; do you have a strong opinion on this? Is there a need for the private security sector to change its role?
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Washington, DC:What do you make of the problem of "blue on white", or where US military personnel accidentally shoot contractors, in Iraq?
Staff writer Alice Lipowicz:Thank you for your question. This is a personal tragedy for the people involved; however, I'm sorry but I have not formed an opinion about whether some type of legislative or policy change is needed to address this problem.
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Orlando, FL:What does Mr. Waxman propose to do about I.T. contracts? The government needs I.T. systems. These new systems are the largest and most complex ever built to date. Most of the contractors listed on Waxmans sight use CMMI level 5 engineering practices to develop these systems. If a contractor is asked to build a system for the government, and the government gives vague requirements for the system, do you think the contractor is going to refuse?
Staff writer Alice Lipowicz:Good point. Few contractors will refuse a business opportunity. But I suppose we can hope that if enough contractors complain that the requirements are "vague" in advance of the award, those requirements could and should be clarified before the RFP goes out.
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Maryland:Outsourcing of what are realistically permanent positions as DHS is bad. Why? Because DHS uses taxpayer money to train Booz Allen recruits who then control the workflow at DHS. Look at the results ... they are all over the place and even when other contractors have better solutions, others are not given a chance. The rot is at high and low level.
Staff writer Alice Lipowicz:Thank you for your note. I'd be glad to talk with you further about your experiences with this.
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Vienna, VA:The OCI portions of the Clean Contractor Act do not refer to the FAR; whereas other sections cite the FAR. Do you believe this is intentional and the committe is going to the extreme of disallowing OCI Mitigation Plans?
Staff writer Alice Lipowicz:Thank you for participating. I don't have an opinion on this yet; I'd need to do further research on these sections of the legislation.
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Pete:Dan makes a great point in question #6. There also does not appear to be an adequate remedy for businesses who wish to contest a decision in those situations where a LSI does the purchasing for their federal government client and the federal client actually is calling the shots behind the scenes. In the majority of cases, GAO sees this as a classic prime-subcontractor issue, despite the fact that LSI is merely acting as an agent for the government. Congr. Waxman's Cmte may wish to look into this a little further. There is at least one specific case currently in the Federal Court of Claims.
Staff writer Alice Lipowicz:Hi, and welcome. Would you please forward to me a case number or some URl or something so I can familiarize myself with this federal court case? It sounds interesting. Thank you.
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Dustoff WV:Should the Office of Inspector General be partitioned so that there is an arm dedicated to contract oversight, staffed with the appropriate professionals and allowing faster resolution to complaints? Our experience has been that issues and irregularities reported via the IG take extrodinarily long and many times do not complete investigations in a timely manner allowing relief or restitution.
Staff writer Alice Lipowicz:Thank you for participating. This is the first time I've heard this suggestion. What does everyone think? Also, I'd like to hear more about your experience with the IG's office.
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