Caution urged on border, immigration contracts

Agencies must learn from mistakes made during three recent spending and acquisition "binges" ahead of an anticipated immigration- and border security-related procurement spike, a House official said Thursday.

At a management-focused panel discussion Thursday, Michael McCarthy, staff director for the House Oversight and Government Reform Subcommittee on Government Management, Organization and Procurement, said concerns about contracting on Capitol Hill stem from poor results during the last several years' acquisitions spikes. These upswings were natural responses to the emergencies of Sept. 11, the war in Iraq and Hurricane Katrina, but the waste that ensued in some cases has caused apprehension, he said.

"If we could have spent a ton of money that would have gotten people off the overpasses in New Orleans two and three days after the hurricane, it would have been money well spent; no one would have any problem with that," McCarthy said. "Where the government does run into problems is when it does things very quickly on a no-bid basis, on an emergency basis and doesn't stop to revisit anything after the immediate emergency has passed."

The discussion was hosted by software provider Primavera and the public relations firm O'Keeffe & Company.

McCarthy said he sees another period of high spending on the way to respond to immigration and border security demands.

"You have large contracts to secure the Southwest border," McCarthy said. "People are going to use technology. They're going to use drone airplanes, towers, sensors, etc."

McCarthy also mentioned the Real ID program, which would require states to produce standardized drivers' licenses and identification cards, as an immigration-related initiative likely to necessitate high spending levels.

Real ID, if enacted, would "require states to spend billions -- literally billions -- of dollars improving drivers' license infrastructure," McCarthy said. It would also require the more than 200 million people who currently have state drivers' licenses to show up at their local Department of Motor Vehicles to get a new ID card. "Just in terms of the management and logistics challenge -- a lot of these state agencies don't have the infrastructure to handle this."

McCarthy said in many cases the increased spending is and will be necessary, but that legislators want to ensure contracts are awarded in a way that achieves the desired results. "We're really spending a lot of money in the name of increased security, and the question is, 'What is your return on investment with some of these issues?' " he said.

Homeland Security Department spokesman Larry Orluskie said "post-Sept. 11 we have obviously seen some changes in spending on protecting our homeland. It's a necessity."

He declined to comment on a possible spending spike related to immigration issues.

Increased acquisition for border initiatives likely would come in a range of forms, from technology to manpower, said Paul Murphy, president of Eagle Eye Publishers Inc., a Fairfax, Va.-based market research company. (Eagle Eye processes the data for Government Executive's annual Top 200 Contractors special issue.)

Murphy said spending and procurement could increase in order to put in sensors, build fences and even process and cross-check licenses and birth certificates. But he noted that a spending binge could be curbed by political opposition to border initiatives.

"There may be a backlash," Murphy said. "There's already a growing backlash about the fence, and I think there are some unresolved issues with surveillance programs and whether they can be legally justified. Until legal issues are resolved, there could be a dampening effect on spending."

McCarthy said legislators learned several "big picture" things from the security, Iraq and Katrina procurement bursts and hope to avoid similar mistakes in the future.

"First, emergency justifications for lack of competition [and] for no-bid awards [have been] carried on long beyond the period of actual emergency," he said. "Second, there are a lot of contracts being managed by other contractors and not by government officials. Third, there's excessive tiering of subcontractors where you have sub after sub after sub."

McCarthy also said there was an insufficient use of past performance data to determine further eligibility for contracts, and cited the excessive use of certain types of contracts such as cost-plus contracts that are "ripe for waste and abuse."

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