Groups clash over contract fraud claims

Two groups interested in reforming federal contracting ? both with ties to the former Clinton administration ? are at odds regarding what government should do to clean up procurement.

The Center for American Progress, a think-tank headed by former Clinton chief of staff John Podesta, issued May 14 the report "A Return to Competitive Contracting: Congress Needs to Clean Up the Procurement Process Mess." The center invited Rep. Henry Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, to give a speech as part of the ceremony announcing the report.

Later the same day, the Professional Services Council, a trade association headed by Stan Soloway, a former Clinton deputy undersecretary of defense for acquisition reform, issued a rebuttal challenging the CAP report's conclusions. Soloway is a Washington Technology columnist.

The CAP report states that the number of contracts awarded without full and open competition rose by 115 percent ? from $67 billion to $145 billion ?between fiscal years 2000 and 2005. During the same period, federal contracting overall rose only 86 percent, from $203 billion to $377 billion.

According to PSC, the CAP conclusion counts task orders issued under indefinite-delivery, indefinite-quantity contracts held by a single company as noncompetitive awards, even though the vast majority of such contracts are awarded through competition. IDIQ contracts are intended for situations where the government doesn't know in advance what its exact needs will be.

"While it would be entirely fair to have a discussion about how to ensure such contracts are awarded and utilized properly, the claim that they are 'non-competitive' is entirely incorrect," PSC wrote in its rebuttal.

The CAP report emphasizes a 2006 statement from Housing and Urban Development Secretary Alphonso Jackson, who told the Dallas Business Journal that he once halted a contract he had planned to award because the contractor said he didn't like President Bush. "He didn't get the contract," Jackson told the newspaper. "Why should I reward someone who doesn't like the president?"

In its rebuttal, PSC argues that CAP tries to present isolated cases and Jackson's statement as evidence of growing fraud and abuse in contracting, but has no broader empirical evidence to support the conclusion. "While contract fraud is unacceptable in any form, and should be dealt with aggressively and appropriately, nothing in the CAP report, or in the work of its primary sources, lends credence to the claim that contract fraud has increased."

Soloway, in releasing the report, acknowledged that the growth in federal spending calls for responsible oversight to prevent fraud and abuse.

"We should be entirely intolerant of true fraud," Soloway said. "But at the same time, we must empower and encourage civil servants and contractors alike to be innovative. That is where the real progress for America will be found."