DoD Bridles at Proposed Harsher Contractor Sanctions

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WASHINGTON — U.S. government officials are taking issue with a commission’s recommendation to increase suspensions and debarments of misbehaving contractors.

Ashton Carter, defense undersecretary of acquisitions, logistics and technology, said in a late-March written statement to the Commission on Wartime Contracting that its recommendation — to mandate the suspension of companies with contract-related indictments — could lead to misuse of a tool that protects the government’s interest.

“Such an approach may have a chilling effect on contractor cooperation in identifying and fixing real problems including those that affect the health and safety of our personnel,” Carter said.

Carter said he supports suspension and debarment officials having the discretion “to determine on a case-by-case basis what makes the best sense.” Suspension and debarment officials say the recommendation — one of 32 the commission made in a Feb. 24 report — fails to solve the root problems of contractor fraud while potentially adding problems.

Army suspension and debarment official Uldric Fiore also raised concerns that the commission’s recommendations overstep legal rights and jurisdictions in some cases. “You can always say ‘We should do more.’ But how much is more?” Fiore asked. “At what point are we doing so much more that we’re depriving due process?” An interagency group of suspension and debarment officials last week submitted comments on the commission’s report. One member of that group familiar with a draft of the response characterized it as being critical of some recommendations.

The commission declined to release the comments publicly.

Agencies vary in how aggressively they apply suspension and debarment rules to cases of contractor misconduct.

For example, last year the State Department, which had 74,784 contracts according to USASpending.gov, took six suspension and debarment actions. The Army, with about six times as many contracts, took more than 40 times as many suspension and debarment actions.

Commission co-chairman Chris Shays said the commission’s recommendations were crafted after hundreds of meetings and hearings with federal officials and staff, many of whom have worked in the contracting field.

Though some agencies argue they cannot be more aggressive with suspensions and debarments, Shays contends the actions are still used infrequently, and outrageous examples persist of companies that did not deserve to get contracts.

Commissioner Dov Zakheim, a former Defense Department comptroller, said government officials like Carter may not see the benefit of the recommendations because they are enmeshed in the work.

“I appreciate where he’s coming from, but he hasn’t convinced me that the commission is on the wrong track,” Zakheim said. “We are very aware that this is not meant to be a punishment in the sense that a lot of people think that’s what we’re talking about. What we want to ensure is that the government and the taxpayer is protected.” The commission’s recommendations were submitted to Congress. Its final report is due in July.

Some in Congress have taken note of the recommendations, especially as other oversight committees investigate waste, fraud and abuse in government contracts.

Sen. Claire McCaskill (D-Mo.) chairwoman of the Homeland Security and Governmental Affairs subcommittee on contracting oversight and member of the Armed Services Committee, said in an email that she is looking closely at the commission’s recommendations and how they relate to issues before her committees.

“The report highlights the need to improve oversight, transparency, and accountability within contingency contracting, and also contains many recommendations which could improve the management and oversight of all government contracts,” McCaskill said.

Commissioners say that their primary focus for improvements has been on contingency contracting but some of the problems they have seen and solutions there are recommending could apply to other contract areas.

Zakheim said he does not want policymakers to confuse the issues and would rather they focus reform efforts on contingency contracting practices, on which warfighters depend.

“And then if there are positive lessons to be learned for the larger acquisition world and contracting, so much the better,” he said.

Project on Government Oversight general counsel Scott Amey, who has testified before the commission about the need for better contract oversight, said that although it is difficult to predict how Congress will react to this commission’s recommendations, the topic of government accountability and spending is garnering a lot of interest and previous commissions have been received well.

Amey points to the Acquisition Advisory Panel, another congressionally chartered committee tasked with finding ways to improve federal procurement policies and practices.

Congress and the Office of Management and Budget used the panel’s recommendations to support legislation and regulatory changes, he said.

“Congress is certainly receptive from the perspective of the contracting system, especially now with the emphasis on budget constraints and saving money,” Amey said.