Defense, GSA officials vow to clean up contracting

Senior Defense Department and General Services Administration officials trumpeted a new zero-tolerance policy for skirting acquisition laws and regulations on Tuesday.

The Pentagon's chief procurement executive, Deidre Lee, joined GSA Administrator Stephen Perry in announcing a joint initiative called Get It Right, which they said would address significant deficiencies in government contracting, many of which have been exposed by an ongoing investigation of GSA contracting as well as reports of misuse of contracts for military and reconstruction efforts in Iraq.

Addressing a capacity crowd in an auditorium at GSA headquarters, and via a Web broadcast viewed by GSA and Defense employees nationwide, Lee and Perry said instances of improper contracting constituted a tiny portion of their organization's overall activities. Both acknowledged that corners had been cut and procedures hadn't been followed in some cases, but they said their plan, which will require agency employees and contracting officers to be more circumspect about how contracts are awarded, would correct those problems.

"We're striving here to achieve a zero-deficiency environment," Perry said. "No exceptions, no excuses."

The most recent cases of improper contracting center on GSA's Federal Technology Service, which administers technology-related contracts on other agencies' behalf. Defense is FTS' biggest customer, and media reports and GSA inspector general audits have shown FTS employees have awarded work unrelated to technology using contracts specially designed for those purposes. In some cases, FTS' Defense clients also chose the companies they wanted to win contracts, and some of those awards were made without full and open competition, the inspector general has found. Those purchases affect hundreds of millions of dollars in federal funds.

The Defense inspector general has issued several reports in the past few years documenting abuses of the GSA schedules, a set of prenegotiated contracts awarded to thousands of vendors and open to all federal agencies. Lee acknowledged that those problems weren't news to her, and pointed to a recent example of a GSA technology schedule being used to procure interrogation services for Abu Ghraib prison in Iraq.

"I fully support using those vehicles properly," Lee said of the schedules and other GSA administered contracts. To that end, Defense contracting officers now will be required to fulfill a series of obligations before using non-Defense contracts or procurement organizations, in order to create an auditable trail of how a contract was awarded and what was spent. Lee said such transparency depends on being able to "follow the money."

For all purchases of goods and services worth more than $100,000, Defense contracting officers must determine if the purchase is within the scope of the contract, Lee said. They must also question whether they'd save money by using an in-house contracting office. If they do send work outside, they must ensure it is appropriate for the contract the outside agency plans to use, and that a plan is in place to properly administer it, Lee said. She also admonished GSA contracting officers to comply with legal requirements that certain Defense schedules purchases be solicited among at least three vendors.

Defense also plans to examine some contracts after they've been awarded to see if proper procedures were followed. GSA is reviewing all contracts for goods and services valued at more than $100,000 that it awarded for other agencies in the past year, in order to determine whether the work was within the scope of its contract. That review will be complete within the next few weeks, officials said.

Defense program managers, financial managers and contractors also will be more closely scrutinized. Program managers must determine that there is a bona fide need to spend obligated funds, as required by law, Lee said. The Defense inspector general has questioned whether some Defense agencies have fulfilled that obligation before sending funds to FTS to spend on their behalf. Financial managers will be held accountable for ensuring that money is properly handled, and contractors are expected to notify government officials if they feel any work is outside the scope of their contract, Lee said.

For its part, GSA plans to educate its contracting workforce on proper procedures, though Perry acknowledged that the funding to do that could be hard to find, and said, "No amount of training is going to cause someone not to cut a corner."

GSA employees are using "checklists to self-assess proper usage of GSA contract vehicles," according to a set of briefing points GSA released after Perry's speech. The agency also is studying whether it employs enough contracting personnel to handle GSA's multibillion-dollar annual workload, David Drabkin, GSA's deputy associate administrator for acquisition policy, said in a briefing with journalists.

Perry also said he wants to better communicate with GSA's congressional oversight committees about the agency's activities, saying GSA hadn't done a good job of that. He said he also planned to keep the Office of Management and Budget better updated on steps he's taking to improve contracting.

He emphasized that the reported cases of GSA contracting abuse are rare. "The [work of] the large majority of our acquisition workforce…in many instances is brilliant," he said in a press briefing.

Perry chastised those who focus on GSA's shortcomings, saying, "We have not tended to tell that story [of proper contracting]…because it gets overshadowed by an occasional misstep. And I think that's unfair."

He and other officials had spent "countless hours" correcting GSA's deficiencies, Perry said, at the expense of time they could have spent advancing the agency's plan for reform.

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