| Further steps towards transparent contracting
This
Congress, the House and Senate have passed important contract reforms,
but neither body has assembled them into a comprehensive package. The
Waxman "Clean Contracting" amendment to the DOD authorization bill
consolidates these provisions and other reforms into a far-reaching
measure to protect taxpayers. The provisions in the amendment are a
response to pervasive waste, fraud, and abuse uncovered during
congressional, GAO, and Inspector General investigations.
The
Clean Contracting amendment would (1) require agencies to enhance
competition in contracting, (2) limit the use of abuse-prone contracts,
(3) rebuild the federal acquisition workforce, (4) strengthen
anti-fraud measures, and (5) increase transparency in federal
contracting.
Enhanced Competition Provisions
Minimizing
sole-source contracts. This section would curb spending on no-bid
contracts by requiring large federal agencies to develop and implement
a plan to promote competition and minimize the use of noncompetitive
contracts. This provision is vital because noncompetitive contracts
have soared from $67 billion in 2000 to $207 billion in 2006.
Limiting
the length of non-competitive contracts. This section would limit the
duration of no-bid contracts awarded in emergencies to nine months.
During the response to Hurricane Katrina, no-bid contracts that were
awarded without competition have lasted for years and cost taxpayers
hundreds of millions of dollars.
Enhancing competition in
multiple award contracts. This section would give all contractors under
a multiple award contract a fair opportunity to bid for work under the
contract, thereby increasing competition in these contracts.
Curbing Abuse-Prone Contracts
Minimizing
cost-plus contracts. This section would require agencies to minimize
the use of cost-reimbursement-type contracts. Cost-plus contracts leave
the government vulnerable to wasteful spending since they provide the
contractor with little or no incentive to control costs. Spending on
this type of contract rose from $62 billion in 2000 to $110 billion in
2005.
Limiting lead-system integrators. This section would
prohibit contracts that rely on private contractors to serve as
"lead-system integrators" who both manage and perform the contract.
These types of contracts, which are exemplified by the Coast Guard's
"Deepwater" contract, have led to billions in wasteful spending.
Prohibiting
excessive pass-through charges. This section would require regulations
to prevent contractors from billing taxpayers for excessive markups on
work that is done by subcontractors. This provision would prevent the
abuses that occurred after Hurricane Katrina, where taxpayers were
charged $2,480 for "blue roofs" that actually cost under $300.
Minimizing
abuse of commercial item authority. This section would require
additional cost and pricing information for goods and services "of a
type" found in the commercial market place. This would save taxpayer
dollars by requiring contractors to justify prices for items that are
not regularly sold to commercial customers.
Restricting
interagency contracts. This section would require regulations to
prevent abuse of interagency contracts. The provision is designed to
prevent abuses like the one that occurred when the Department of
Defense hired interrogators in Abu Ghraib under a contract to provide
information technology run by the Department of the Interior.
Linking
award fees to acquisition outcomes. This section would require award
fees to be paid only when a contractor has at least a satisfactory
level of performance. A series of audit reports have documented that
contractors often receive large bonuses even when they do not meet
performance objectives, such as the tens of millions of dollars in
bonuses paid to General Dynamics under a Marine Corps contract for the
expeditionary fighting vehicle which is now at least $1 billion over
budget and eight years behind schedule.
Acquisition Workforce Improvements
Acquisition
workforce development fund. This section would mandate that agencies
devote at least an additional 2% of their service contracting budgets
to contract oversight, planning, and administration. The provision is
needed because acquisition workforce has declined 25% since the
mid-1990s while the volume of contracting has soared, leading to a
greatly over-extended workforce.
Contingency contracting corps.
This section would authorize the establishment of a contingency
contracting corps to facilitate rapid contracting in the event of a
national emergency.
Anti-Fraud Provisions
Whistleblower
protection for contractor employees. This section would provide
whistleblower protections for all federal contractor employees. It
responds to testimony that contractors working for the Halliburton
subsidiary KBR were fired after reporting egregious examples of
wasteful spending.
Mandatory fraud reporting. This section would
require both domestic and overseas contractors to report violations of
federal criminal law and overcharging. Corruption has tainted a wide
array of contract initiatives, including the reconstruction in Iraq,
the response to Hurricane Katrina, and major Defense Department
procurements.
Preventing contractor conflicts of interest. This
section requires federal regulations to prevent organizational and
personal conflicts of interest among contractor employees.
Congressional investigations have documented that agencies have
sometimes hired contractors with conflicts of interest to oversee the
work of other contractors.
GAO access to contractor employees.
This section would give GAO the authority to interview contractor
employees. A series of GAO reports has found that agencies increasingly
rely on contractors to fill roles previously held by government
employees, including up to 45% of the program office staff at some DOD
components.
Contract Transparency
Disclosure
of CEO salaries. This section requires privately held contractors with
large federal contracts, such as Blackwater, to disclose the
compensation of their top executives.
Database for suspension and debarment. This section would create a database for companies that have been suspended or disbarred.
Improvements
to the Federal Procurement Data System. This section enhances the
transparency of multiple-award and interagency contracts by requiring
additional reporting to the existing federal procurement database.
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