By: Edward T. DeLisle
For those who regularly read our blog, you know that we have followed the government’s recent concern about fraud and abuse in the federal procurement process. The GAO has issued reports that recite such abuse relative to the 8(a), HUBZone and SDVOSB programs. As those reports indicate, companies have been awarded set-aside contracts through those programs, but were not qualified to receive them. In certain circumstances, the apparent fraud was so blatant that the hubris, which certainly existed to think such abuses would go unnoticed, puts Charlie Sheen to shame. Yet, as the GAO reports state, even when the abuses were uncovered, many of these contractors continued to receive government awards. It appears that some contractors performing work overseas in places like Iraq and Afghanistan may also be receiving awards that they do not deserve.
As reported by Govexec.com, government agencies responsible for overseas contracts are not properly recording past performance history in the CPAR and PPIR electronic databases. The biggest offenders appear to be the State Department, the Department of Defense and the U.S. Agency for International Development (USAID). Based upon information supplied to the Commission on Wartime Contracting, congressionally mandated to investigate overseas contracting activities, these agencies have failed to properly report past performance history in up to 90% of the contingency contracts they have issued. While the failure to report this information is problematic for many reasons, it certainly exposes the government to contractors who are less than ideal for important government contracts. This is especially an issue as it relates to contractors in line for suspension or debarment. As former Connecticut Congressman Christopher Shays, who is the chairman of the Commission, stated: “[I]f suspensions and debarments are impeded by bureaucratic decisions or inertia, then companies that have committed fraud may continue receiving taxpayer funds. In either case, untrustworthy contractors can continue profiting from government work, responsible businesses may be denied opportunities, and costs to taxpayers can climb.”
Over the years, the government has increasingly relied upon “best value” procurement to let contracts. Past performance is almost always an important factor in determining “best value.” In fact, in most cases, it is the most important factor. If federal agencies intend to continue issuing contracts in this fashion, a practice that is highly questionable for the purchase of certain services, such as construction, then they must make it a point to create a system that allows those deserving of awards to receive them. In the case of small business set aside contracts, the government has started to slowly move in this direction. The VA, for example, is now vetting those contractors on its on-line SDVOSB registry to verify eligibility. If this function is performed correctly, it will greatly enhance the probability that contracts will be let to those who deserve them. With respect to past performance history, there is a system in place. Federal agencies simply need to use it. Hopefully, the findings exposed by the Commission on Wartime Contracting make this a reality.
Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.