Increased suspensions part of broader trend
I’ve been ruminating on this Government Accountability Office report tracking the sharp rise in suspension and debarment actions by government agencies.
The rise is not an isolated case, but rather a part of a larger trend of increased scrutiny and pressure on contractors. Other factors included insourcing, increased aggressiveness by inspector generals, the rise of lowest price contracting and a more critical Congress.
Some may tie these actions to a supposed anti-business attitude by the Obama administration, and there is probably some truth to that, but that might be too simple an explanation.
I think there are multiple factors, and none are going to go away anytime soon.
The increased pressure on contractors starts with the explosion in spending in the years following the Sept. 11, 2001, terrorist attacks.
This increase in spending came following the Clinton years, during which the government workforce shrank, including a lot of people working in acquisition and procurement.
The increase also occurred during the George W. Bush administration, which had a strong belief that the private sector was more efficient and effective than the government, so we saw a sharp increase in outsourcing and the rise of a large contractor workforce.
The result was increased spending with contractors, and at the same time, there was a weakened oversight capability.
The increases in spending peaked around 2008, and then the counter pressures of tighter budgets and finally sequestration kicked in.
A lot of the so-called anti-contractor activities we are seeing today are part of the pendulum swinging back. The budget pressures aren't going to go away anytime soon, so we should expect more scrutiny of how dollars are spent.
Another factor that needs to be layered on here is how commonplace technology is. Everyone it seems has a smartphone, or at the least access to the Internet. We shop, bank and communicate online.
Because of this, we have little patience when things go wrong like Healthcare.gov, even if shopping on Amazon is infinitely less complex that creating and operating a health insurance exchange.
We look at the $80 billion IT budget and we want to ask are we getting our money’s worth. And we should ask those questions.
Are government contractors good actors or bad? Also an appropriate question.
But I still have an issue with the suspension and debarment process, and how it has been applied. When I look at the results of two of the higher profile suspensions in recent years – GTSI and MicroTech – I’m just not sure the enforcement effort was worth the result.
In the case of GTSI, the company was suspended when the Small Business Administration launched an investigation into how it used its small business partners to win business.
The accusations were serious but never really panned out. A month letter, the suspension was lifted, and GTSI had to live under a monitoring program, but no wrongdoing was ever proved.
Similar with MicroTech. The company was suspended because of questions that it improperly portrayed itself as a small business. In the end, the suspension was lifted and MicroTech had to admit it made a paperwork error on its 8(a) application a decade ago.
Again, none of the serious allegations were ever proven.
Coincidentally, both the GTSI and MicroTech investigations were kicked off following Washington Post articles that were very critical of the two companies.
Anyway, my problem is that the suspensions came before the investigations. Send them a show cause letter, subpoena documents, put them on notice, interview employees and managers, launch an audit, but don’t suspend them until you know they’ve done something wrong.
Why put the cart before the horse?
The financial damage that was done far exceeded any alleged wrongdoing in these cases.
The other question I have is, what is the benefit of the sharp rise in suspension and debarment activities?
GAO needs to address that question and whether the suspensions and debarments are appropriate. What’s the process for deciding to take these actions?
I’m all for holding contractors accountable, and the government needs to know it is working with responsible companies, but we also need balance and due process. And right now, I question whether we are getting it.
Posted by Nick Wakeman on May 23, 2014 at 9:25 AM