FEMA | The Contracting Education Academy

July 2, 2013 By cs

FEMA official gets two years’ probation for revolving-door relationship with contractor

Private industry frequently considers hiring existing and former federal government employees for their experience, knowledge base and skill set. As a reaction to the continuing perception that high-level federal employees jump from government to private industry and take sensitive government information with them, over the years Congress has introduced complex and often overlapping revolving-door legislation that imposes post-government employment restrictions on certain employees. While many government employees successfully transition to the private sector, failure to observe revolving-door laws and regulations can result in severe consequences for both contractors and government employees. A recent example of what can go wrong for both such parties is the case of Timothy Cannon and the Gallup Organisation.

On April 9 2013 Judge Jackson of the District Court for the District of Columbia sentenced Timothy Cannon, former director of the human capital division at the Federal Emergency Management Agency (FEMA), to two years of probation for conflict of interest violations.

According to Cannon’s plea, he helped Gallup to acquire a $6 million contract, while at the same time pursuing employment with the company. As a result of its alleged employment discussions with Cannon and related conduct, Gallup faces potential liability for civil damages and penalties under the False Claims Act and the Procurement Integrity Act, including treble damages and disgorgement of all money received under the contract. Moreover, these types of case always raise the risk of the contractor’s suspension or debarment, which would preclude any new contract awards for up to three years. This case serves as a reminder for private contractors wishing to hire existing or former government employees that they must have rigorous internal controls in place in order to ensure compliance with post-government employment requirements.

Keep reading this article at: http://www.internationallawoffice.com/newsletters/detail.aspx?g=cb1ea107-d51f-4ad7-b375-00f8a3dad2d7&redir=1

November 23, 2011 By cs

Lawmakers, OMB push to ban more ‘bad-actor’ contractors

Procedures for disqualifying dishonest or incompetent federal contractors are too rarely exploited, according to a consensus of several senators, the White House and cross-agency watchdogs. But there is disagreement over whether the solution is improving application of the rules or whether Congress should make some suspensions and debarments mandatory.

At a Wednesday hearing of the Senate Homeland Security and Governmental Affairs Committee, Chairman Joe Lieberman, I-Conn., expressed alarm that a series of reports from the Government Accountability Office and inspectors general have shown a reluctance of many agencies to refer unsatisfactory contractors to the Excluded Parties List System maintained by the General Services Administration.

A Pentagon report “just last month shows that over a 10-year period, DoD awarded $255 million to contractors who were convicted of criminal fraud; and almost $574 billion to contractors involved in civil fraud cases that resulted in a settlement or judgment against the contractor,” Lieberman said. “Last year, the Department of Homeland Security’s inspector general found 23 cases where the department had canceled a contract because of poor performance, but in none of those cases did DHS suspend or debar the contractor.”

The Federal Emergency Management Agency, despite the existence of an anti-fraud task force following Hurricane Katrina in 2005, has not sent a single name to the list, Lieberman added, noting that the rarity of suspensions and debarments has been a concern of the committee as far back as 1981.

Sen. Claire McCaskill, D-Mo., said she got angry about the issue when a U.S. soldier was killed in Iraq by a negligent truck driver working for a U.S. contractor. The U.S. military continued using the contractor. “It’s a matter of character for our nation,” said McCaskill, who is preparing related legislation to implement recommendations of the recently disbanded Commission on Wartime Contracting.

She regretted that proposals to require more suspensions and debarments founder because of a fear of litigation, because it’s “too much trouble,” some contractors are seen as “too big to fail,” or “it is unclear who is accountable for a failure” to pursue that course, she said. “We need to draw a line in the sand.”

Dan Gordon, the departing administrator of the Office of Federal Procurement Policy, said the Obama administration had made significant progress on the issue over the past three years, but the system’s “weak link” is ensuring that a fraudulent contractor is flagged for action in a timely way. “Sometimes the referral takes too long, as historically agencies have been very bad about sharing, either because officials didn’t check the list, checked it too late, or because of problems in the spelling of an entity’s name,” he said.

He pointed to a memo to agencies released Tuesday by Office of Management and Budget Director Jack Lew that requires agencies to appoint a senior accountable official to “assess the agency’s suspension and debarment program — including the adequacy of available training and resources — review internal policies and procedures,” ensure databases are checked before grants and contracts are awarded, and “take corrective action if an award is improperly made to a suspended or debarred contractor.”

Gordon said OMB has been working with its Interagency Suspension and Debarment Committee to improve training and create detailed agency guidance. But he expressed skepticism toward any prospective legislation making certain referrals mandatory, saying agency cultures differ and mandatory referrals that take away discretion could undermine the role of suspension and debarment officials.

Allison Lerner, the inspector general of the National Science Foundation who co-chairs an IG working group on the issue, said suspensions and debarments “could be used more frequently and effectively.” The resistance comes from misconceptions among agency contracting officials, she said. Some fear jeopardizing investigations by disclosing negative information on contractors and some hold the incorrect beliefs that a decision must be based only on facts uncovered in a judicial process and that IG investigations cannot be cited as evidence against contractors.

Panelists agreed that the model policy is that practiced by the Air Force. Steven Shaw, deputy general counsel for contractor responsibility at the Air Force described two recent suspensions, one involving the Boeing Co.’s launch systems units and the other involving programs within L-3 Communications. Sixty-two percent of his suspensions and debarments are “fact-based,” he said, meaning his team doesn’t wait for the Justice Department to bring criminal charges. “We take a broad view of the type of misconduct, not just criminal fraud but as it relates to business integrity, tax issues, the Foreign Corrupt Practices Act or commercial fraud,” he said.

The Air Force also uses a “carrot-and-stick approach that is aggressive at the front end” but still allows contractors to prevent fraud through risk management and ethics programs.

Ranking committee member Sen. Susan Collins, R-Maine, who as a staff director worked on the 1981 hearing chaired by then-Sen. William Cohen, R-Maine, reminded the hearing that the goal of suspension and debarment is “not to punish contractors but to protect” the taxpayer, and that allowing “bad actors” to win new contracts is “not fair or ethical to the honest contractors.” She said she is considering legislation that would force agencies — she mentioned the Justice Department — to step up use of the tool.

Such a move is opposed by Alan Chvotkin, executive vice president and counsel of the Professional Services Council, a contractors trade group. He praised this week’s OMB memo as good “cross-agency coordination to bring attention” to the appropriate use of suspension and debarment. But he stressed the “very limited circumstances” under which “automatic exclusion” should be applied to a contractor.

“The government has wide flexibility to assess each individual situation to determine whether the government is at risk, including built-in due process procedures,” he said. “Doing it in an arbitrary way would be a mistake and convert it into a punishment, which it is not.”

– by Charles S. Clark – Government Executive – November 16, 2011 at http://www.govexec.com/story_page.cfm?articleid=49355&dcn=e_gvet

November 2, 2011 By cs

Rep. Lankford says training will ease acquisition workforce transition

The federal acquisition workforce is getting younger and less experienced, and that worries Congressman James Lankford (R-Okla.).

The chairman of the Oversight and Government Reform subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform said agencies need to do more to train new employees to make the best acquisition decisions.

“We interact with lot of contracting officers that are very dedicated employee as well as contractors that are trying to do the right thing, but there’s a lot of confusion right now, it seems, on what is the right [contract] vehicle to use,” said Lankford in an interview with Federal News Radio. “There seems to be a tremendous transition of individuals where we have new contracting officers or fairly inexperienced ones who are getting their sea legs in this and trying to determine what levels of risk can they take in interpreting some of these rules in the FAR. It’s an interesting time of transition.”

Lankford said vendors tell him their staff knows more about the acquisition rules than many of the contracting officers they deal with.

This dearth of trained acquisition workforce puts agencies at risk for misspending money, he said.

To that end, Lankford is proposing a series of hearings over the next few months to try to educate his counterparts that the “pennywise, pound foolish” approach many in Congress have taken over the years no longer is a good one.

“We get the best value for the taxpayer when the contracting officer and people involved in it know completely, have confidence in what they are doing, can look at all the different vehicles and make good choices,” he said. “We have to allow that contracting officer to look at it and make good, wise decisions, they are the voice of the taxpayer at that point.”

He said the challenge is getting members to understand the benefits of spending a little money to save a lot of money.

“CBO can’t score that. They can’t score a savings a money over potential of better training, better equipped,” he said. “We know it will happen, but at the end of the day when we actually are voting on a bill, they can’t show there’s a savings that we know it’s coming. That comes just through education.”

Two administrations and several members of Congress have tried to improve the training the acquisition workforce receives. The Office of Federal Procurement Policy tried to work with lawmakers to create a acquisition training fund for civilian agencies, similar to the one the Defense Department has for its employees. The administration requested $158 million in 2011 for an acquisition workforce training fund. Congress approved no funding for the fund in either of the last two years.

OFPP tried to go around Capitol Hill by issuing new certification requirements for project managers and contracting officer technical representatives.

OFPP also wants to grow the acquisition workforce by 5 percent by 2014.

The Federal Acquisition Institute found in fiscal 2009 —the latest information available — there were 106,506 employees classified in the 1100 job series or as project/program managers or contracting officer technical representatives.

FAI found the number of 1102s—contracting officers—increased by 3,200 from 2008 to 2009, and up 6,200 since 2000.

The survey also found between 12 percent-and-25-percent of all employees in acquisition workforce positions were eligible to retire in 2009.

Lankford may be getting some help in pushing for more acquisition workforce training.

The Senate Homeland Security and Governmental Affairs Committee passed the Federal Acquisition Institute Improvement Act in June and is waiting debate by the full Senate.

Lankford said the goal is not to create a new bureaucracy for training, but make sure the people in the workforce are well trained.

As a part of training, Lankford said he’s also concerned about the proliferation of multiple award contracts and how they limit competition.

“A contracting officer is going to what’s safe and what they know will work and where they had previous people. If you continue to do multi-award, if you continue to pull on people who have done it in the past and who you know can get it done, it’s the least amount of work and it’s the easiest,” he said. “The challenge of it is how do we start raising up subcontractors into prime contractors? We have to continue to raise up a new generation constantly of subs to primes and we have to get best value. Best value may not be putting all of these things together. We need to be able to reward contracting officers for doing the additional work and provide some incentives for them to go around that because that will save the taxpayer dollar in the end.”

Lankford also wants agencies to use the suspension and debarment process more regularly as a tool to limit bad contractors.

He held a hearing in October on how agencies are using this process, and plans on continuing the subcommittee’s oversight of the process in 2012.

“HHS and DHS both have reports due to us by Christmas this year on their changes that are happening with suspension and debarments,” Lankford said. “Obviously, FEMA has a long way to go on this but they are active in taking that in. HHS, not so much. They’re one of the agencies that have not done suspension and debarments. They said during the hearing it’s their intention to get this done. It’s moving that from intention to actually accomplishing that. They have a tremendous amount of contracts. They can do it. It’s not too difficult. We just have to pay attention to it.”

— by Jason Miller – Federal News Radio – Nov. 2, 2011 – http://www.federalnewsradio.com/?nid=85&sid=2616224

October 13, 2011 By cs

Agencies can improve suspension and debarment process, says GAO

Too many federal agencies are insufficiently protecting against contractor fraud or incompetence by using the suspension and debarment process, the Government Accountability Office reported Thursday. Agencies with records of scant use of the practice should beef up dedicated staff and commit to greater use of the interagency committee designed for this purpose, the auditors said.

“Agencies that fail to devote sufficient attention to suspension and debarment issues likely will continue to have limited levels of activity and risk fostering a perception that they are not serious about holding the entities they deal with accountable,” William Woods, GAO’s director of acquisition and sourcing management, told a hearing of the House Oversight and Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform. But “we need to keep the process informal to avoid red tape, because agencies need to move quickly to protect the government’s interest,” he added.

GAO examined the number of suspensions and debarments imposed under the Federal Acquisition Regulation of 10 major contracting agencies over five fiscal years. Most active were the Defense Logistics Agency, the Navy, the General Services Administration and Homeland Security Department’s Immigration and Customs Enforcement.

Agencies with little or no use of the procedure were the Commerce, Health and Human Services, Justice, State and Treasury departments, as well as DHS’ Federal Emergency Management Agency.

“The mountains of federal forms are frustrating” for many good contractors, said panel chairman Rep. James Lankford, R-Okla., “but certain contractors try to defraud, or are chronically poor performers. We need to find out why some agencies uncover the abuse and others don’t” so the government can enforce a process that “strengthens the integrity of overall contract system.”

The Defense Department has far and away the highest raw number of suspensions and debarments (1,616 over five years), but when viewed as a percentage of contracting dollars, as ranking member Rep. Gerry Connolly, D-Va. noted, the Environmental Protection Agency has a far higher rate.

HHS, Connolly and Republican members pointed out, did not post a single contractor suspension or debarment in the past five years, despite a 2010 budget that included $368 billion in grants and $19 billion in contracts.

GAO’s Woods said he was surprised by the numbers at HHS. His report does not recommend any new legislation on suspensions (which are temporary) and debarments (which are long term), but calls for the agencies deemed inactive to mimic the organizational approaches of the active ones. That means assigning full-time dedicated staff and resources, developing detailed implementation guidance, and promoting a case referral process.

In addition, GAO recommends that the administrator of the Office of Federal Procurement Policy issue governmentwide guidance to ensure that agencies are aware of the elements of an active suspension and debarment program and the importance of cooperating with the Interagency Suspension and Debarment Committee. Witnesses at the hearing suggested that many agencies lack full commitment to that panel, which was created in 1986.

Under the Federal Acquisition Regulation and a parallel set of rules for nonprocurement contracting, agencies are responsible for examining contractors and uncovering fraud or nonperformance and then posting the companies on the website of the Excluded Parties List System maintained by the General Services Administration. Contractors’ rights are supposed to be protected through established procedures for challenging the listing through a timely meeting with top agency officials and a “mini trial” in which they can present evidence defending their record.

Nearly 84 percent of suspensions and debarments are required by statute — such as past violators of the 1970 Clean Air or 1972 Clean Water acts — according to GAO, which focused its study on the 16 percent that are discretionary.

The agencies deemed inactive generally accepted GAO’s conclusions. Nick Nyack, chief procurement official at Homeland Security Department, said, “We get this. We’re going to get it right and will be a best practices agency in short order.” Under questioning, he said it could be done within three months.

Three months was also the estimate for making changes the members elicited from Nancy Gunderson, suspension and debarment official at HHS. She said the department had terminated numerous grants and contracts for reasons such as questionable scientific integrity. But HHS efforts thus far on the issue have focused on promoting an electronic desk reference, staff training and looking at other agencies’ procedures, she said.

Agencies considered models were represented by Richard Pelletier, a suspension and department official at EPA, who said his agency since 1981 has maintained a “robust” approach that involves two offices with full-time staff.

Steven Shaw, deputy general counsel of the Air Force, stressed the importance protecting contractors’ rights by having officials who aren’t in the procurement chain “examine evidence, not just the fact of an indictment.” He favors a carrot-and-stick approach that includes regular meetings with important contractors and not mandatory debarments. The overall dollar figures, rather than the number of suspensions or debarments, he added, might be a better metric on agency activity than raw numbers.

— by Charles S. Clark – Government Executive – October 6, 2011 – http://www.govexec.com/story_page.cfm?articleid=49011&dcn=e_tma

September 2, 2011 By cs

Pentagon contracting policy faulted in two reports

Defense Department contractors in war zones wasted more than $30 billion during the past decade through poor planning and management, the chairs of the Commission on Wartime Contracting in Iraq and Afghanistan said on Monday in an op-ed previewing a report due out this week.

During those same 10 years, the value of Pentagon contracts awarded without competitive bidding tripled, from $50 billion in 2001 to more than $140 billion in 2010, according to a report the nonprofit Center for Public Integrity released Monday.

In a critique titled “Reducing Waste in War Contracts” published in The Washington Post, former Rep. Christopher Shays, R-Conn., and Mark Thibault, former deputy director of the Defense Contract Audit Agency, wrote that all eight members of the wartime commission “agree that major changes in law and policy are needed to avoid confusion and waste in the next contingency, whether it involves armed struggle overseas or response to disasters at home.”

The panel chairmen said taxpayer dollars have been “wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak interagency coordination, and subpar performance or outright misconduct by some contractors and federal employees.”

As solutions, they recommended:

Designating a dual-hatted official to coordinate contracting at the Office of Management and Budget who would participate in meetings of the National Security Council;
Using risk analysis more in deciding whether a function not inherently governmental should be outsourced;
Reviewing current and pending projects for evidence of unsustainability, with an eye toward canceling those that don’t appear promising;
Creating a permanent inspector general for operations during contingencies.

Meanwhile, the Center for Public Integrity’s research findings, which it will unfold daily this week in a series called “Windfalls of War,” include an analysis of federal data concluding that “the Pentagon’s competed contracts, based on dollar figures, fell to 55 percent in the first two quarters of 2011, a number lower than any point in the last 10 years since the terrorist attacks of 9/11.” The center noted that the issue of noncompetitive contracting practices has been examined many times by the Government Accountability Office, the Defense Department’s inspector general and the Commission on Wartime Contracting.

President Obama weighed in on the problem both as a candidate in 2008 and in a presidential memo in 2009. The center also cited a memo promising efforts at greater use of “multisource, continuously competitively bid” contracts issued in 2010 by Defense Undersecretary Ashton B. Carter, the Pentagon’s senior procurement chief.

But “campaign pledges and memos have made little headway in combating the problem,” wrote analyst Sharon Weinberger, whose team studied a dozen government reports and investigations and interviewed eight former government officials and experts.

Coming installments in the series will examine no-bid contracting at the Energy, Homeland Security and State departments, as well as the Federal Emergency Management Agency, all of which, the center says, have better records on the issue than does the Pentagon.

The final report of the wartime commission, chartered by Congress in 2008, is scheduled for release on Wednesday.

— by Charles S. Clark – Government Executive – August 29, 2011 at http://www.govexec.com/story_page.cfm?articleid=48650&dcn=e_tma

Search this Website