A glass half empty to some, half full to others

Buylines | Policies, strategies and trends to watch

Stan Soloway

Two hearings on the acquisition process held on Capitol Hill during the third week of July told two different stories. Through them the troubling dichotomy of the current debate over federal acquisition was eminently clear.

"The vast majority of government contractors are performing well," said Comptroller General David Walker at a July 17 hearing of the Senate Homeland Security and Government Affairs Committee, which featured a discussion about substantive ways federal acquisition could be improved. Walker also was candid about the Government Accountability Office's concerns over gaps in the federal acquisition process and identified a series of systemic problems requiring attention, including an imbalance between "wants and needs," unrealistic program requirements, inappropriate use of contractors, not using contracts as effective management tools, and lack of workforce development and accountability.

Noticeably absent from Walker's list were rampant fraud and abuse. GAO doesn't hesitate to identify fraud and abuse when it finds them, and no one at GAO or in industry would claim that such issues never arise. But Walker's testimony reflected a far more nuanced and thoughtful assessment of the most prevalent acquisition issues and an implicit recognition that fraud and abuse, while never tolerable, are not as widespread as some claim.

The next day, in the other chamber, a different kind of hearing took place. The House Oversight and Government Reform Committee's Government Management, Organization and Procurement Subcommittee held a hearing on "poor contractor performance." In that hearing, the Project on Government Oversight alleged that the contracting system is full of companies that have demonstrated histories of misconduct. As evidence, POGO cited its own Federal Contractor Misconduct Database, which it says shows that 39 of the top 50 federal contractors paid more than $15 billion in fines in the past 12 years.

Leave aside that 50 percent of those fines were paid by just three large oil companies, overall the database lacks critical context, is misleading and is simply not a reliable source of meaningful information on the cases it cites.
Meanwhile, Rep. Carolyn Maloney (D-N.Y.), concerned that "fraudulent contractors are being given a green light to pillage the federal coffers," has proposed creating a centralized database to integrate civil, criminal and administrative actions against contractors as a tool for contracting officers to use in determining whether contractors are responsible.

POGO isn't the problem. Its facts may be wrong and even some of its philosophy, but its intent ? to ensure the appropriate use and management of public dollars ? is worthy. The same is true of Rep. Maloney and her bill. However, the suggestion that corporate behavior and past performance are not currently considered in the award of government contracts is simply wrong ? witness Enron Corp., MCI/WorldCom and Andersen Consulting, or the long list of GAO protest decisions upholding agency use of past-performance reports in contract award decisions. But objectively assessing, and then using, corporate behavioral history in source selection is a complex undertaking requiring extensive analysis, thought and balance. Such discussions did not occur at the House hearing, nor do they appear to be on lawmakers' agenda.

We ought to be concerned about a process in which legislative proposals are crafted primarily on the basis of hyperbole and essentially context-free hearings or allegations rather than on the kind of substantive dialogue that took place at the Senate hearing July 17. That dichotomy is evident throughout the current public discourse on acquisition, from the blogosphere to Capitol Hill. It is an unhealthy dynamic that is increasingly leading to proposed solutions that ignore the salient issues and how real improvement can be achieved. The taxpayers deserve better.

Stan Soloway is president of the Professional Services Council. His e-mail is soloway@pscouncil.org.

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