Government Executive - Authors - Robert Brodsky

To the Brink

Robert Brodsky — Wed, 01 Jun 2011 00:00:00 -0400

How did the federal government come within an hour of shutting down?

In hindsight, the near-shutdown of the federal government in early April should have come as no surprise-an outcome as predictable as death, taxes and petty partisan disputes. The handwriting was on the wall shortly after last fall's elections, when Republicans took back the House on a vow to drastically cut government spending and reduce the federal deficit. A failure to win control of the Senate, however, limited the GOP's legislative options, leaving members-particularly fire-breathing, Tea Party-backed freshmen eager to slash federal spending-with limited capacity to implement their fiscal plans.

The one surefire weapon Republicans had in their arsenal was the threat of a shutdown of federal operations if Congress could not agree to a fiscal 2011 budget. Still, early on House Republican leaders, particularly those who were around for the messy political fallout from shutdowns in late 1995 and early 1996, dismissed the so-called nuclear option as unlikely. "I don't think America is looking for a shutdown situation," Rep. Eric Cantor, R-Va., who was in line to become House majority leader, said just before the elections. "It sends the wrong signal that there aren't adults in charge in Washington."

But that's very nearly what occurred. In spite of all the talk that a shutdown was in no one's interest, Congress and the White House never-theless went to the brink, battling to the bitter end over budgets cuts and unrelated policy provisions, and avoiding a shutdown literally at the 11th hour. How did it get to that point? And what was that first week in April like for those who lived and breathed the threat of the first shutdown of government in 15 years-namely the roughly 2 million employees of the federal government?

Preamble

It's not like Congress, before and after the elections, didn't have ample time and opportunity to pass a budget for fiscal 2011, which started on Oct. 1 last year. But lawmakers couldn't agree on a budget by the time the fiscal year started, and passed a continuing resolution in September to keep agencies open.

That was followed by three more CRs in December and two in March, which included about $10 billion in cuts pushed by House Republicans. With each new stopgap measure, the threat of a shutdown was temporarily averted, but the hard work of passing a budget was kicked down the road. When the calendar turned to April, the day of reckoning finally arrived.

The sixth continuing resolution was set to expire at 11:59 p.m. on Friday, April 8. By that point, both sides had dug in their heels, declaring another short-term spending bill was not acceptable. In a closed-door meeting with freshman Republicans, House Speaker John Boehner, R-Ohio, urged his colleagues to "keep up the rhetoric" in the fight. "The more you keep on them, the more leverage I've got," Boehner told members.

Congress would have to agree to a budget for the final six months of the fiscal year or the government would cease much of its operations. The deadline loomed large as federal employees arrived in their offices on April 4 to begin their work week.

Monday, April 4 11 a.m.

The National Treasury Employees Union and National Federation of Federal Employees urge government workers, their family members and friends to contact their elected representatives the following day to voice their opposition to a shutdown and to the deep spending cuts proposed by House Republicans. A shutdown, the labor leaders declare, will delay tax refunds for millions of Americans, close national parks and jeopardize food safety standards.

The unions also take aim at the Obama administration, which up to this point has refused to release its contingency plans for a shutdown. These documents, which will remain a closely guarded secret throughout much of the week, indicate how many, and which type of employees, would come to work during a shutdown and who would be furloughed.

"Federal employees are being held hostage because these plans are not being made available," says NFFE National President William R. Dougan. Administration officials remain quiet, privately saying the plans have not been finalized. Even with five days to reach a deal, anxiety and uncertainty have crept in. "I'm so frustrated," one federal worker writes on GovExec.com. "Are we closing down or not? I'm not looking forward to a close down, but hate the uncertainty."

Behind the scenes, preparations for a shutdown quietly begin. Office of Management and Budget Deputy Director Jeffrey Zients issues a memo to agency deputy secretaries and chiefs of staff, instructing them to begin preparing for a potential shutdown. "Given the realities of the calendar, good management requires that we continue contingency planning for an orderly shutdown should the negotiations not be completed by the end of the current CR," he writes.

Tuesday, April 5 10:15 a.m.

Sensing that negotiations are stalling, President Obama holds a meeting at the White House with Boehner, House Appropriations Chairman Hal Rogers, R-Ky.; Senate Majority Leader Harry Reid, D-Nev.; and Senate Appropriations Chairman Daniel Inouye, D-Hawaii. The hour-long sit-down bears no fruit. The two sides appear to be at an impasse. Senate Democrats and the White House say they're willing to accept $33 billion in cuts from current spending limits. Hard-liners in the House Republican caucus hold out for nothing less than the $61 billion in reductions they passed in February. That bill is a non-starter for Democrats, not only because of the big-ticket spending cuts but also due to controversial policy riders, including ones that would defund the administration's health care reform law, block funds for the regulation of greenhouse gas emissions and eliminate federal funding for Planned Parenthood and the Corporation for Public Broadcasting.

Boehner, meanwhile, refuses to disclose his target number. Instead, he offers a one-week spending bill for civilian agencies, which includes $12 billion in cuts, and funding for the rest of the fiscal year for the Defense Department.

The plan is rejected immediately by Obama. "That is not the way to run a budget," he says during an unscheduled White House press briefing.

With both sides refusing to blink, labor unions again call for contingency plans to be released, this time in a letter to Obama. The White House continues to keep a close hold on the plans. Frustration among federal workers begins to boil over. "It's time to have the military [deploy] around the Capitol building and lock Congress in until they can do their job," writes a Navy employee. "Shut down their food source from within and give them one small pizza per person per day."

Late in the evening, more sobering news arrives. The Office of Personnel Management issues guidance on the rules surrounding furloughs, benefits and compensation during a shutdown. The primer is a welcome piece of specific information about how a closure of federal operations would unfold, but it's also a stark reminder that a train is rapidly coming down the tracks. And there appears to be no way to stop it.

Wednesday, April 6

The threat of a shutdown, previously a Beltway-oriented discussion, now goes national. News outlets begin covering the potential shutdown in real time. Countdown clocks appear on websites everywhere. The administration begins leaking post-apocalyptic details about the effects of a shutdown in which housing loan guarantees cease, small business loans dry up and patent processes are suspended.

10:45 a.m.

Rep. Jim Moran, D-Va., whose Northern Virginia district is home to tens of thousands of federal workers and contractors, addresses the elephant in the room for the federal workforce. It's unlikely, he speculates, that those employees furloughed in a shutdown will receive back pay for time lost when the government opens again. "Federal employees need to understand this is not 1995, when we closed down and they did not go to work and they were fully reimbursed," he says.

"I may face bankruptcy because these jerks can't play nice together," one employee writes. Another complains that "federal workers are left holding the bag. Unfortunately, it appears the bag will be empty. There are some federal workers who . . . live paycheck to paycheck and will be harmed greatly by this." The administration estimates that 800,000 feds could be furloughed, roughly the same as during the 1996 shutdown. The truth is, though, no one really knows how many employees could be affected. The government is structured very differently than it was 15 years ago, and agencies have wide discretion to determine which employees are essential to the protection of life and property, and thus can't be furloughed.

The figures also don't take into account the hundreds of thousands of federal contractors who could see their operations come to a halt in the absence of funding. "This will be a very serious problem when payments don't come when they are expected," says John Cooney, an OMB official during the Reagan administration and now an attorney at Venable LLP.

Negotiations with lawmakers go well into the evening. But a nighttime summit at the White House offers little hope. And now the deadline is a mere 48 hours away.

Thursday, April 7

Finally, the information valve is turned on. Agencies begin disclosing elements of their contingency plans to employees. Most workers will be asked to return to work on Monday to begin "orderly shutdown activities" for up to four hours. Employees on travel are informed that they should return to their home offices as soon as it's practical if a shutdown occurs.

OMB says furloughed employees may be required to turn in their work-issued BlackBerrys or laptops. Military personnel will continue to serve but nobody will be paid until an appropriations bill is passed. "The confusion and anxiety in our ranks is so thick, you can slice it with a knife," writes a Defense Contract Management Agency employee. "If it happens, the American people will feel the impact of a shutdown both immediately and for weeks after it's over."

3:00 p.m.

The worst news to date: OMB issues a memo informing agencies to begin notifying federal employees immediately if they will be furloughed. "We know that the current uncertainty and threat of a shutdown is a tremendous burden on federal employees," writes OMB Director Jacob J. Lew. The words are cold comfort for feds, some of whom voice their frustrations at an evening town hall meeting in Arlington, Va., hosted by Moran. "People aren't prepared for this," a U.S. Coast Guard employee says. "No one is explaining any of this stuff." A State Department employee vents, "There's an overriding atmosphere that federal workers are lazy. Do they understand that we work hard?"

Budget negotiators on Capitol Hill and in the White House go to bed without a deal.

Friday, April 8

Time's up: Agencies begin releasing their contingency plans. The news is not pretty. In the event of a shutdown, more than 16,000 Environmental Protection Agency employees will be furloughed, along with 46,000 Homeland Security Department workers and up to 55,000 Interior Department staffers. All across the government, agencies begin notifying unlucky workers in staff meetings, emails and conference calls. This immediately creates uncomfortable situations at federal offices across the country, in which certain employees are told they are essential to operations, while those in adjoining cubicles are informed they'll be furloughed.

"I have a strong feeling of solidarity with my co-workers and wish I could be furloughed with them," writes one Navy civilian employee. "It doesn't seem right for me to still be working while they are suffering." The news is particularly devastating for families in which both breadwinners work for the government.

"We've spent our savings in the past year to be with our son, who has had nine surgeries in eight months," one despondent employee writes. "My concern is I can't afford to be out of work. . . . I'm just really upset and don't know what to do."

One bit of optimistic news. Four Democratic senators, Mark Warner and Jim Webb of Virginia, and Benjamin Cardin and Barbara Mikulski of Maryland, introduce legislation that would ensure that all federal workers receive retroactive pay for the duration of a government shutdown.

1:39 p.m.

Salt in the wounds: The Libertarian Party sends out a release calling for the permanent shutdown of most of the government, including the Education Department and the Internal Revenue Service. "Just think how a permanent government shutdown would allow so many Americans to regain the blessings of liberty," says Wes Benedict, the party's executive director.

1:59 p.m.

The American Federation of Government Employees announces it will file a lawsuit against the administration's shutdown plans, arguing that requiring certain federal employees to work during a funding lapse with no certainty that they'll be paid for their efforts violates constitutional provisions against involuntary servitude. "There's no guarantee that Congress will keep the administration's promise to pay those employees once the shutdown is over," says AFGE President John Gage.

Meanwhile, budget negotiators appear to be close on a number-somewhere in the neighborhood of $36 billion in cuts. But Republicans are insistent on including the Planned Parenthood rider, an absolute non-starter with Democrats. Federal workers are dumbstruck. After weeks of debate about the need to cut spending, could they really be furloughed because of a side issue? Small contingents of employees stage protests at various locations in Washington to voice their concerns about the effects of widespread furloughs and disruptions in agency operations.

Still, as employees depart for the day, there is no deal. Now there's nothing left to do but wait for the clock to strike midnight. As the evening unfolds, rumors of a deal begin to circulate. But time is running very short, and it begins to look unlikely that all sides can agree on a package, push it through both the House and Senate, and get it to the president's desk in time.

10:46 P.M.

Reid spokesman Jon Summers sends out a Twitter message: "We have an agreement.

Details/statement coming soon." The deal cuts $39 billion from current spending-the additional cuts coming as a trade-off for dropping the Planned Parenthood rider. Obama says the deal will allow "hundreds of thousands of Americans to show up at work and take home their paychecks on time, including our brave men and women in uniform." The Senate scrambles to pass a seventh short-term continuing resolution ending on April 15-enough time to pass the larger measure. But the House misses the midnight deadline. Nonetheless, Lew directs agencies to stay open in expectation of a deal. Millions of federal workers breathe easily for the first time in a week.

Postscript

On Monday, the first day back at work, the president reaches out directly to federal employees. "I know the past few weeks have been a time of uncertainty and concern for you and your families, but your patience and professionalism throughout this period have affirmed my confidence in you, and everyone who works in our government," Obama writes. "You do your jobs without complaint or much recognition. But it is men and women like you who help make America all it is, by responding to the needs of our people and keeping our country safe and secure."

As the memo reaches the in-boxes of millions of workers, the conversation in Washington has already turned to the fight over raising the debt limit and cuts in the fiscal 2012 budget. And to the threat of yet another shutdown showdown in September.

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Whistling in the Dark

Robert Brodsky — Sun, 01 May 2011 00:00:00 -0400

Congress has beefed up laws to shield workers who expose corporate fraud, but government whistleblowers are still waiting.

In the waning hours of the 111th Congress in December 2010, as lawmakers pushed to finish up votes on a new START treaty and free health care for Sept. 11 first responders, a less prominent bill was sputtering toward yet another demise.

For more than a decade, House and Senate lawmakers, along with a contingent of determined watchdog groups, have worked to pass legislation that would significantly enhance protections for federal employees who blow the whistle on waste or misconduct at their agencies. Each year, they get closer. But in a manner reminiscent of Lucy pulling back the football just as Charlie Brown is about to kick it, the federal whistleblower bill always seems so near, yet it remains just out of reach.

In the most recent example, an anonymous senator placed a hold on the 2010 Whistleblower Protection Enhancement Act after it cleared the House by unanimous consent. When the clock ran out on the 111th legislative session, the bill died, leaving whistleblowers with limited protections from supervisory retaliation. Watchdogs argue existing safeguards for whistleblowers are inadequate because of judicial and legislative limitations.

At a time when the government is racking up record deficits and is pressed to ferret out wasteful spending, the move has left many confused and more than a bit angry. "We are in the Golden Age for corporate freedom of speech, and we are stuck in the legal Dark Ages for the legal free speech rights of government workers," says Tom Devine, legal director of the Government Accountability Project, a whistleblower protection group that was among the most vocal advocates for the bill. "It's a strange anomaly."

Private Sector Protection

On the heels of the banking crisis, shortfalls in food safety inspections and numerous contracting scandals, exposing corporate misconduct became a priority last year for Congress. While public sector whistleblower bills have stalled, Congress has shown no such reluctance to approve protections for private sector workers. The health care bill, which narrowly passed Congress in 2010, allows whistleblowers to seek protection under the False Claims Act. The act is considered among the most effective disclosure laws because claimants can receive a share of the funds that the government recovers in fraud cases. A provision in the Food Safety Modernization Act, signed into law in December, provides sweeping protections for corporate employees who report violations of Food and Drug Administration regulations.

"Quite clearly there is a strong appetite to protect consumers in the private sector. Unfortunately, Congress has similarly failed to protect federal workers. They continue to have second-class rights," says Angela Canterbury, director of public policy at the Project on Government Oversight.

"Whistleblowers have received Cadillac rights-federal courts, financial rewards and jury trials-for the private sector," adds Stephen M. Kohn, executive director of the National Whistleblowers Center. "And there is absolutely no reason why those same rights cannot be given to government workers. There is no distinction."

The Recovery Act, meanwhile, included protections for employees of private contractors and grant recipients to disclose waste and fraud without fear of reprisal. Those rights were temporary, but Sens. Claire McCaskill, D-Mo., and Jim Webb, D-Va., have introduced legislation to make them permanent, including a requirement that agency inspectors general investigate claims by contractor employees.

Arguably the broadest whistleblower protection measure was included in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The financial regulatory reform law, which restructures many aspects of the American financial system, provided anti-retaliation rights for industry employees. Even more significant, whistleblowers became eligible for awards of 10 percent to 30 percent of the amount that the Securities Exchange Commission recovers if the sanction imposed exceeds $1 million. Prior to Dodd-Frank, whistleblowers were capped at 10 percent and the law, which was almost never invoked, applied exclusively to insider trading cases.

"Already, since the passage of the act, we have seen a slight uptick in the number of tips and complaints received, and, more importantly, an uptick in the quality of complaints," SEC Chairwoman Mary Schapiro told the Senate Banking, Housing and Urban Affairs Committee in September. But media reports indicate the whistleblower program is off to a slow start, generating only 168 tips in its first six-plus months of existence-less than one tip per day.

The whistleblower provisions have attracted some industry critics. Kevin Wallace, a partner at the New York-based law firm Dewey & LeBoeuf, says the bill provides tipsters an incentive to skip over the internal compliance programs that corporations were required to develop, often at great time and expense, under the 2002 Sarbanes-Oxley Act.

Sarbanes-Oxley allows companies "to clean up their own operations, which is one of the goals of internal compliance," says Wallace, who represents businesses in whistleblower cases. "There is also a concern that a person is aware of wrongdoing, but would not act to stop it in a timely manner because the more it builds up over time, it could increase the size of the fine that the whistleblower could recover." SEC planned to release final regulations in late April for implementing the reforms. Industry has lobbied the commission to require individuals to bring complaints to the internal compliance boards first. In its proposed regulations, SEC wants to give whistleblowers the option of reporting allegations to the government or to the company, which then would have 90 days to complete an investigation. "Many issuers think this time frame is arbitrary," Wallace says. "Quite frankly, it's hard to get an investigation completed in that time."

One Step Forward

Federal employees technically have been shielded from agency retaliation since the passage of the 1989 Whistleblower Protection Act. In practice, however, those protections have produced mixed results. The law allows whistleblowers to file complaints with the Office of Special Counsel, the federal agency tasked with investigating alleged prohibited personnel practices. OSC first seeks voluntary corrective action from the agency involved. If the agency fails to remedy the complaint, then the employee can request a hearing with the Merit Systems Protection Board, a quasi-judicial agency that adjudicates whistleblower complaints. During the past decade, the board rarely ruled in favor of employees, but that appears to be changing.

After the appointment of MSPB Chairwoman Susan Grundmann in late 2009, whistleblower victories rose sharply. In 2010, the board sided with workers in four cases, compared with only three during the previous 10 years, according to figures from the Government Accountability Project. In one high-profile case, MSPB ruled that the Interior Department did not have enough evidence to dismiss former Park Police Chief Teresa Chambers after she publicly expressed concern about staffing and budget shortages. Chambers is now back in her old job.

According to Bruce Fong, chief of OSC's Oakland Field Office, the winds have begun to shift for whistleblowers. His office turned in favorable actions for complainants in 50 percent of prohibited personnel practices and whistleblower cases in the past two years, doubling the number from 2008. "I see improvements," Fong says. "There is a growing awareness of whistleblower rights among the agencies . . . It's a combination of a lot of factors, including pressure from members of Congress. There are a lot of different reasons why I am encouraged we are moving in the right direction from the so-called Dark Ages in the 1980s."

Others are more skeptical, however. Marsha Coleman-Adebayo was a senior policy analyst for the Environmental Protection Agency in 1996 when she filed complaints alleging that a U.S. firm was mining vanadium in South Africa and harming the environment and human health. When EPA subsequently did not promote Coleman-Adebayo, she successfully filed suit against the agency, alleging racial and gender discrimination. She helped secure passage of the 2002 No Fear Act, the first civil rights law of the 21st century, which discourages federal managers and supervisors from engaging in unlawful discrimination and retaliation.

But Coleman-Adebayo, who now runs the No FEAR Coalition, a group that works with current and former government whistleblowers, says these individuals are still treated as second-class citizens. "The message in the workplace is that if you are in a senior position and found liable nothing happens in the federal government," she says. "The machinery of government rolls on."

Statutory limits cap compensatory damages for federal employees at $300,000, which Coleman-Adebayo says is not enough to compel the government to radically change its policies. "We really need a sustained and organized group of federal workers who are committed in the long term to push through policies and pieces of legislation that can force structural changes within the federal government," she says.

Political Pull

Despite the groundswell of support, recent attempts to reform federal whistleblower laws have come up short. Versions of the Whistleblower Protection Enhancement Act have been proposed for more than a decade, only to be blocked by procedural hurdles from Senate Republicans, at least five of whom have placed holds on the bill.

The most recent measure, sponsored by Sen. Daniel Akaka, D-Hawaii, would have provided new or expanded rights to 40,000 Transportation Security Administration baggage screeners, federal scientists, government contractors and intelligence agency employees. Appellate reviews of MSPB cases involving the 1989 Whistleblower Protection Act no longer would be sent exclusively to the U.S. Federal Circuit Court of Appeals, which has ruled in favor of government whistleblowers in only three of 211 cases. The bill also would have closed a loophole that protects only the first person who discloses misconduct and would give OSC the authority to file friend of the court briefs to support employees appealing MSPB rulings. The board would be required to file annual reports on the outcomes of whistleblower cases and an experimental whistleblower ombudsman position would be created in offices of inspectors general to advise employees of their rights.

The bill appeared to be well on its way to passage, winning approval in the Senate in early December by unanimous consent. But the measure hit a speed bump when the House stripped out provisions that would have provided protection for whistleblowers at intelligence and national security agencies. Lawmakers said they were concerned the provision could lead to disclosures of classified information similar to those published on the WikiLeaks website.

A congressional Democratic source says the change actually was made to appease then-House Intelligence Committee Ranking Member Pete Hoekstra, R-Mich., who didn't want to share jurisdiction of federal intelligence employees with the House Oversight and Government Reform Committee. "WikiLeaks was just a cover because [House Majority Leader John] Boehner told them not to air their dirty laundry in public," the source says. "It was a turf fight."

When the stripped-down bill reached the Senate, an anonymous lawmaker placed a hold on it, likely on behalf of a House Republican who wanted to regain control of the process during the 112th Congress, the source says. "While the secret Scrooge was frustrating and we have not won yet, we are on the precipice of victory," says Devine at the Government Accountability Project. "I sure don't feel defeated, having only earned a 534-to-secret 1 mandate."

Oversight Committee Chairman Darrell Issa, R-Calif., has pledged to introduce a new version of the whistleblower bill by summer and has asked Rep. Todd Platts, R-Pa., to work with Rep. Chris Van Hollen, D-Md., on the measure. It is unclear whether the bill would include the national security language, although planned hearings on WikiLeaks could influence that decision. In April, Akaka reintroduced his measure in the Senate with the national security provisions.

"I support and intend to advance legislation through the Oversight Committee that enhances protections for federal employees who report waste, fraud and abuse," Issa said in February. "Ensuring safe channels for responsible reporting and improving the recourse to address alleged reprisals is clearly in the best interests of federal workers and taxpayers." The congressional source says compromises could be necessary to ensure the bill's passage. "We need to do something on this," the source says. "We may have to split the baby" and get rid of the national security provisions again.

Such action could draw opposition from some unlikely sources. At the National Whistleblowers Center, Kohn says a bill that fails to include national security provisions "is not worthy of becoming law. They need to go back to the drawing board because what came out at the end was a law that would not work."

The Senior Executives Association also has raised concerns, particularly with language that would provide whistleblowers enhanced rights to jury trials. "The legal and factual issues in whistleblower cases are complex, technical and often political and beyond the experience of most jurors. And the threat of a jury trial would serve as a deterrent to effective management," the group said in a statement. "SEA supports strengthening whistleblower protections, but will continue to ensure that any modifications do not unfairly target managers."

For whistleblowers who have risked their careers to speak out against government malfeasance, reforming the disclosure system is a simple matter of equity and basic fairness. "Whistleblowing is not for the faint-hearted," says OSC's Fong.

"They stick their necks out and do what's right. And when you try to change the status quo, the status quo tends to bite back."

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Labor Fight Renewed

Robert Brodsky — Sun, 01 May 2011 00:00:00 -0400

Republican lawmakers balk at deals that require union pay for contract workers.

Some partisan battles are so well-ingrained in the culture you can virtually set your clock by them. Political street fights over federal spending and taxes are guaranteed in every Congress. Likewise for hot-button social issues, such as abortion and immigration. Another reliable controversy surrounds government guidance on the often obscure labor rules for federal construction projects.

Known as project labor agreements, these prehire deals between the owners of construction firms and labor organizations require collectively bargained wages and benefits for project employees. PLAs typically mandate that the contractor hire its workers through union halls and that workers pay dues for the length of the project, even if they do not belong to a union. Prime and subcontractors must follow union rules on pensions, work conditions and dispute resolution, while workers agree not to walk off the job.

Washington clashes over PLAs have been a constant dating back to 1992, when President George H.W. Bush forbade agencies from requiring construction contractors to use them. President Bill Clinton overturned Bush's order, recommending PLAs on contracts worth more than $5 million. Eight years later, President George W. Bush reversed his predecessor's order, adding a clause stipulating that agencies stay neutral on the use of labor agreements. Like a pingpong ball, PLAs were volleyed again in 2009, when President Obama issued an executive order "encouraging" the use of labor agreements for contracts of $25 million or more. Project labor agreements provide "structure and stability to large-scale construction projects," Obama wrote in the order.

With Republicans now in control of the House and flexing stronger margins in the Senate, opponents are not waiting until the next GOP president is elected to turn back the clock back on PLAs. In February, Rep. John Sullivan, R-Okla., introduced a bill to revive Bush's neutral stance toward PLAs. Sen. David Vitter, R-La., introduced companion legislation.

The measure could garner enough support to pass the House. Rep. Frank Guinta, R-N.H.,earlier this year offered an amendment that would have prohibited government-mandated PLAs. The measure failed by a 210-210 vote, but several Republicans were not present for the final tally, which took place at 1:30 a.m. on a Saturday during a budget debate in February. Guinta, who is co-sponsoring Sullivan's legislation, argues PLAs are an "outrageous and massive waste of scarce tax dollars."

Guinta cites a study by the Beacon Hill Institute at Suffolk University that estimates PLAs increase the costs of public construction projects by 12 percent to 18 percent. The study suggests if Obama's order were in effect in 2008, PLAs would have increased the cost to taxpayers by $1.6 billion to $2.6 billion. Unemployment in the construction industry, meanwhile, is near 22 percent, according to federal statistics.

Proponents, however, say private sector PLAs are common-they were used in the rebuilding of the I-35 W Bridge in Minneapolis after it collapsed and in construction of the Trans-Alaska pipeline-because they attract an abundance of well-qualified labor. The Energy Department also frequently uses these agreements for construction projects at many of its national laboratories. The department says PLA projects often are completed quicker and have lower rates of injuries than other private sector projects.

Using Recovery Act funds, the General Services Administration recently conducted a pilot program to test the use of PLAs in bids for 10 construction projects, each worth more than $100 million. Contractor submissions that included a PLA received a 10 percent increase in their technical bid evaluation, which was then weighed against the company's price proposal. GSA received between three and eight bids for each project, many of which were similar in price, with or without a PLA, says Robert Peck, commissioner of GSA's Public Buildings Service.

In a handful of cases, the PLA bid was higher, but the agency determined "it was worth spending a little more" to guarantee a steady source of labor and prevent work stoppages, Peck says. In total, seven of the 10 contractors selected had PLAs.

Administration officials say Obama's order and a subsequent Federal Acquisition Regulation change merely encourage the use of PLAs and do not require them. "It gives each contracting agency the discretion to decide for itself when, on a project-by-project basis, a PLA may provide economy and efficiency," says Dan Gordon, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget.

But subcommittee Chairman Jim Jordan, R-Ohio, argues Obama's order can be interpreted as a policy mandate. He notes PLAs "tip the scale of an open bid process in favor of organized labor and shut out nonunion shops, many of which are minority- and women-owned. "Only 13 percent of construction workers belong to a labor union," Jordan says.

PLA requirements do not preclude nonunion contractors from bidding on construction projects, but the higher wages and benefits put the contracts out of reach for some small businesses. John Ennis Jr., CEO of Ennis Electric Co. Inc. in Manassas, Va., says his firm lost out on three GSA stimulus funded projects, all to PLAs. "As a result, we have been forced to lay off approximately 15 percent of our workforce, and unless we can find some other opportunities, we could end up laying off over 50 percent of our workforce," Ennis told the subcommittee.

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GSA presses ahead in greening of federal buildings

Robert Brodsky — Fri, 22 Apr 2011 00:00:00 -0400

The General Services Administration announced on Thursday, the eve of Earth Day, that it has selected 16 sustainable building technologies to be tested and evaluated at a number of federal facilities throughout the country.

The agency, which manages 9,600 government-owned or leased properties, will next determine whether the emerging technology can be replicated, and then deployed, on a wider basis at federal and commercial real estate properties nationwide.

After technicians conduct enhanced measurement and verification, findings from the projects will also be used to support development of performance specifications for GSA's real estate portfolio, officials said.

"GSA is leading the way in sustainable design and construction operations," said GSA Administrator Martha Johnson. "By using our real estate portfolio as a test bed for new technologies, we can then provide further innovation in energy efficiency standards and implement best practices that will lead the market."

Sustainable building technologies, specialists say, optimize energy performance, protect and conserve water, enhance indoor environmental quality, reduce waste and environmental impact from materials, curb greenhouse gas emissions associated with building operations, and promote integrated design.

Through its new Green Proving Ground program, GSA evaluates innovative or underutilized technology that can help make federal facilities more energy efficient and therefore less costly to taxpayers.

An October 2009 White House executive order directed agencies to cut greenhouse gas emissions 28 percent by 2020, to boost energy efficiency at facilities and reduce the federal fleet's petroleum consumption. GSA is one of the lead agencies on these initiatives. It also has announced its intention to eventually achieve a zero carbon footprint on all of its facilities. "Pursuing zero environmental footprint is a cool, up-to-date way of saying no waste," Johnson told Government Executive last year. "You're using everything well, that goes to the notion of value and it also goes to the notion of using the taxpayer dollar really, really appropriately. It makes us effective and efficient in a higher-order way."

As part of the program, GSA in November 2010 issued a request for information from commercial organizations, educational institutions and nonprofit groups for new sustainable building technologies and practices.

The submitted products will then be added to a new GSA registry of sustainable technologies and, if proven successful, could potentially lead to a government contract down the road.

Roughly 140 technologies and practices were submitted, and 16 were short-listed for testing because they have the greatest potential to meet GSA's sustainability goals, officials said. The determinations were made after evaluations by GSA officials and the Energy Department's Pacific Northwest National Laboratory.

For fiscal 2011, GSA is testing out a promising wireless temperature sensor for heating and cooling, electrochromic windows that control sunlight allowed in, a nonchemical water treatment system that could significantly reduce water consumption, and a condensing boiler that extracts additional heat from the waste gases by condensing this water vapor to water.

Many of the technologies are being installed as part of building modernization projects funded by the 2009 Recovery Act.

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Administration set to order contractors to disclose campaign contributions

Robert Brodsky — Thu, 21 Apr 2011 00:00:00 -0400

The draft executive order, which has circulated on the blogosphere for about a week and which was independently obtained by Government Executive, would require companies bidding on agency contracts to release a list of contributions or political expenditures that total in excess of $5,000 made on behalf of federal candidates, parties or political action committees.

"It is incumbent that every stage of the contracting process -- from appropriations to contract award to performance to post-performance review -- be free from the undue influence of factors extraneous to the underlying merits of contract decision-making, such as political activity or political favoritism," the order states. "It is important that the contracting process not only adheres to these principles, but also that the public have the utmost confidence that the principles are followed."

The disclosure would be required whenever the aggregate amount of the contributions and expenditures made by the company, its directors or officers, or any affiliates or subsidiaries within its control, exceeds $5,000 to a recipient in a given year, the order states. The rule essentially would require inquiries about contributions from individual officers that come out of their wallets and not out of corporate accounts.

The order would not apply to public-sector unions or grantees, which historically have tended to support Democrats. Most influential federal contractors either stay out of politics or contribute money to members of both parties -- typically giving to the chairmen and ranking members of congressional committees with jurisdiction over their program's purse strings -- and lobby lawmakers on specific issues. Becoming tied to an individual politician or party, some have argued, can damage a company's long-term prospects for doing business with the government.

Political opposition has already emerged. "This order is a purely political act offered under the benign label of disclosure," said Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee and one of several Republicans to publicly condemn the document. "The order would not impose the same requirements on the labor unions or other organizations that support the president. Furthermore, it unnecessarily politicizes the procurement process."

The order would require contractors to disclose contributions to third-party nonprofit groups -- known as a 501(c)(4) organizations -- in which the company has the "reasonable expectation" that the funds would be used to pay for electioneering communications such as paid advertisements.

The Supreme Court, in its landmark Citizens United v. Federal Election Commission case in January 2010, ruled that companies, labor unions and trade associations can make unlimited "independent expenditures" on advertisements supporting candidates through these third-party groups.

The disclosed contractor data would be made publicly available in a centralized, searchable database at Data.gov, a federal website.

The proposal appears to be modeled on a new law in Illinois, which created similar disclosure requirements for state contractors.

An administration official told Government Executive in a statement that additional disclosure is needed to ensure that contracting decisions are not influenced by politics. "Taxpayers deserve to feel confident that federal contracting decisions are based on merit alone and are not influenced by political favoritism," the official said. "That said, this document is a draft EO that is still moving through the standard review and feedback process. It is not a final document. But the president is committed to bringing more accountability and transparency to a federal contracting system that has long needed reform."

But some observers suggest the procurement system is already insulated from politics and that bid decisions are based on factors such as price, technical expertise and past performance. They disagree with the administration's assumption that the system is vulnerable to politics.

"Why would a contracting officer need to see this?" said one acquisition expert familiar with the memo. "Why not just have the company report quarterly or on an annual basis? There is a level of political gamesmanship at play."

The source noted that the timing of the required disclosure -- prior to the award of a contract -- "strongly suggests that political donations will be a consideration during the source selection process."

Some industry officials said the plan shows a lack of awareness of the realities of the procurement system. "The draft order says it is necessary to ensure that politics are not allowed to impair the integrity of the procurement process," said Stan Soloway, president of the Professional Services Council, a contractor trade group. "But by force-feeding irrelevant information to government contracting officers, who would otherwise never consider such factors in a source selection, the rule would actually do precisely what it is intended to stop -- inject politics into the source selection process."

Soloway noted that campaign contribution data are already publicly available in the FEC's disclosure database and in the congressional lobbying database. The order appears to revive and amend aspects of the 2010 DISCLOSE Act, a bill that would have prohibited the funding of campaign ads by government contractors, corporations with at least a 20 percent foreign ownership and recipients of Troubled Asset Relief Program bailout funds. The bill passed the then-Democratically controlled House but did not receive a vote in the Senate.

While the proposed executive order would not impose a ban as envisioned by the DISCLOSE Act, critics believe the result will be the same, and that it could scare companies away from contributing to political opponents of the administration.

"I am concerned that this ill-conceived policy draft could have a chilling effect on the First Amendment rights of individuals to contribute to candidates of their choice," said Sen. Susan Collins, R-Maine, ranking member of the Homeland Security and Governmental Affairs Committee. "It troubles me that the draft executive order could be perceived as making political contributions a factor to be considered in awarding federal contracts."

The order also could prevent some small businesses from working with the government, according to House Small Business Committee Chairman Sam Graves, R-Mo. Graves sent a letter to President Obama on Thursday afternoon calling on him to abandon the order.

"This order will either intimidate contractors not to get involved in politics, or make them believe that they need to contribute to the party in power if they want to compete for contracts," Graves wrote.

The plan does have support among transparency advocates. "The public needs to know who is giving how much to which candidates, and no person or corporation should be allowed to hide behind a shroud of secrecy and prevent the people from seeing who is trying to influence government and policymaking through political contributions," Gary Bass, executive director of the nonpartisan OMB Watch, wrote on his blog.

The watchdog group, however, has a number of questions about how the order would be implemented, including how subsidiaries and affiliates would be defined and what would be the penalties for providing false or misleading information.

The draft order requires the Federal Acquisition Regulatory Council to adopt implementation regulations by the end of 2011. Depending on the effective date of the regulations, the order could be implemented before the 2012 election, when Obama is once again on the ballot.

This article was updated to clarify which online databases were being referred to as sites where contribution information is already public.

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Relying on continuing resolutions wasted billions, says Pentagon acquisition chief

Robert Brodsky — Wed, 20 Apr 2011 00:00:00 -0400

In a speech on Wednesday at the conservative-leaning Heritage Foundation, Ashton B. Carter, undersecretary of defense for acquisition, technology and logistics, argued that the seven continuing resolutions passed by Congress from October 2010 through the second week of April were highly ineffective and resulted in a waste of taxpayer resources.

"It is uneconomical to proceed in this herky-jerky fashion," Carter said. "It cost billions for us to operate in this way. It's like a hidden tax."

He said the lack of a permanent, fixed budget upset some carefully calibrated buying plans and caused the department to shelve other programs that had yet to commence.

Congress finally passed a fiscal 2011 budget for the last six months of the fiscal year last week.

Carter's address focused on his initiative to milk greater savings and more efficiencies out of the roughly $400 billion the department spends to procure goods and services. The acquisition chief said the era of ever-increasing Defense budgets was gone and that the department needed to do "more without more."

The leaner acquisition environment, he said, will feel very different to those in the Defense community who have "grown accustomed to a circumstance where they can always reach for more money."

While much of Carter's focus was on the $200 billion devoted to the services of acquisition, he also suggested that the department may not be done cancelling or scaling back several expensive major weapons programs.

Carter's office has already abandoned several weapons programs, totaling $300 billion, which were either over-budget or inefficient, or which involved a product of which the department had simply acquired enough. They include the presidential helicopter, the Expeditionary Fighting Vehicle and aspects of the Future Combat System.

And while the Pentagon has plucked most of the low-hanging fruit, "there undoubtedly will be more cancellations of that kind," he said.

The alternative to not addressing these problems, Carter said, is more broken programs, ineffective products provided to the warfighter and eroded taxpayer confidence in the department's ability to wisely spend money.

Repeating themes from many previous speeches on this subject, Carter outlined his 23-point plan to drive more efficiencies and savings out of an essentially flat Defense acquisition budget. The plan includes introducing more competition, reducing bureaucracy and unnecessary paperwork, improving the tradecraft of service acquisition, building up the procurement workforce and incentivizing better productivity from industry.

Carter added that the department plans to roll out a new Superior Supply Incentive Program in the coming months that will reward the best performers in the Defense industry with advantages in source selection, performance payments and nonmaterial recognition. The program is modeled after a plan originally scheduled to be introduced by the Navy but which Carter is expanding departmentwide.

"We are trying to reduce cost and not profit," Carter said. "We use profit as an incentive to reduce cost."

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Defense contract audits manager accused of unprofessional behavior

Robert Brodsky — Tue, 19 Apr 2011 00:00:00 -0400

report released on Tuesday by the Defense Department inspector general.

The report, one of several released during the past three years documenting abusive managerial behavior and quality concerns at the Pentagon's premier audit agency, focuses this time on DCAA's Central Region field office in Irving, Texas.

The IG substantiated four of six allegations filed by a complainant to a Defense Department hotline, including claims that a DCAA field office manager created an unprofessional work environment, unnecessarily delayed a 2003 promotion opportunity, provided inadequate supervision and improperly removed an audit finding. Two other allegations -- that a security reinvestigation was used as harassment and that the supervisor based her rating entirely on metrics -- could not be proved, the IG said.

In response, Director Patrick Fitzgerald said DCAA had taken corrective actions, including improving its on-the-job training program. Fitzgerald also advocated retroactively correcting the complainants' promotion, a position the IG suggested is not supported by case law.

"The failure of the supervisor to properly monitor eligible promotion dates represents a laxity in supervision and failure to comply with the agency written policy," Fitzgerald wrote. "Laxity in supervision is misconduct subject to potential disciplinary action …. and the complainant should be made whole as a result of the management misconduct."

Many of these same allegations of supervisory wrongdoing also were investigated in February by DCAA's internal review team, which examines workplace-related concerns.

In 2011, the DCAA deputy director planned to discipline the manager of the Central Region field audit office for unrelated misconduct. The manager, however, resigned before the discipline could be implemented.

Investigators found that the manager "engaged in verbal and written disrespectful, offensive and unprofessional language toward employees. In some instances, the unprofessional language was made in a public setting where other employees heard it."

The supervisor also "inappropriately" mentioned the salaries of certain employees while discussing their performance, the IG found. For example, the manager reportedly told the complainant she "probably gets paid around $80,000 and that DCAA pays benefits of around $50,000 and that is a lot of money to pay to do that audit."

In an email exchange with the complainant, the internal review team also concluded the tone and language the manager used were unnecessary and inappropriate. A supervisor who witnessed the manager's behavior failed to report the behavior to upper management, the IG said.

"While management has the right to question subordinates about the status of audits, they must remain professional in doing so," the report stated. "The manager acknowledged to us that he yelled at one employee in a public area and probably used inappropriate language. He also acknowledged asking about salary amounts during performance conversations. Yelling and other forms of inappropriate and unprofessional behavior by any agency employee should never be tolerated. Management, in particular, must be held to a very high standard of conduct."

Allegations involving questionable managerial behavior by DCAA supervisors are nothing new. A July 2008 report by the Government Accountability Office noted that managers at a California field office threatened a senior auditor with personnel action if he did not remove negative findings from a report criticizing a large federal contractor.

Another auditor, Diem Thi Le, said she was the victim of repeated harassment and intimidation by supervisors, including having her performance evaluation downgraded, and being transferred to another auditing team and told to see a psychiatrist. A follow-up GAO report in 2009 noted that nationwide audit quality problems were rooted in DCAA's poor management environment and culture.

The barrage of unflattering findings led the Pentagon to replace Director April Stephenson with Fitzgerald, who previously served as the Army's auditor general.

The agency has made several substantial changes to improve its audit quality and whistleblower protection in recent years. But only a scant number of supervisors implicated in reports GAO and the Defense IG issued have been removed from their position.

In an interview with Government Executive last July, Fitzgerald said, "bringing resolution to any possible disciplinary action" was a top priority, but he declined to set a timetable or discuss ongoing investigations. "Some of these actions occurred a long time ago. We are working very hard to bring final resolution to these issues and I am optimistic we are close," he said.

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Government implements new performance management law

Robert Brodsky — Mon, 18 Apr 2011 00:00:00 -0400

guidance on implementing a new law that dramatically overhauls government performance management.

The first major revision to the landmark 1993 Government Performance and Results Act, the new bill, signed by President Obama in January, targets a limited number of ambitious outcome-oriented goals and management priorities.

"The administration is committed to practical, useful performance management," OMB Director Jack Lew and Deputy Director Jeffrey Zients wrote in the governmentwide memo issued late last week. "Our goal is to create a performance management framework that encourages good management and innovation without fear of penalty for failing to achieve every ambitious target that has been set, but with heightened pressure to achieve breakthrough gains on priorities."

To begin implementing the law, agencies first must name a deputy secretary -- or the equivalent position -- by May 2 to serve as chief operating officer. "Among other responsibilities, the COO is responsible for providing overall organization management to improve agency performance and achieve the mission and goals of the agency through the use of strategic and performance planning, measurement, analysis, regular assessment of progress, and use of performance information to improve results," the memo stated.

By June 1, a senior executive at the agency must be selected to assume the role of performance improvement officer. Agencies that pick a political appointee as PIO also should name a career senior executive as deputy PIO, according to the memo.

Most agencies already employ a PIO through a Bush administration performance improvement initiative. The 2010 law elevates the PIO role, allowing the official to conduct regular performance reviews, goal selection, analysis and cross-agency collaboration; align personnel performance appraisals; and communicate performance information, OMB said.

Finally, by June 30, agencies must begin running data-driven progress reviews on the high-priority performance goals that were identified in the fiscal 2011 budget. The reviews must be performed at least quarterly.

These goals are expected to focus on outcomes in a limited number of cross-cutting policy areas, including financial management, human capital, procurement, information technology and real property. The 2010 law also requires agencies to report performance against those goals through a single government website instead of submitting them to Congress annually.

Under the 1993 GPRA bill, agencies were required to set myriad goals encompassing virtually every area of their work. The Obama administration has asked agencies to narrow that focus, exclusively homing in on a series of "high-priority performance goals."

Still, even Obama administration supporters have publicly argued there should be fewer, more meaningful goals.

"There are still too many so-called high-priority performance goals -- 128, to be exact -- and many are decipherable only to people inside government," John Podesta, president of the Center for American Progress, a progressive advocacy group, told the Senate Budget Committee's Task Force on Government Performance last month. "Fewer, more resonant goals would raise their profile and better communicate government priorities to the public."

Podesta, who ran the administration's transition committee after the 2008 election, said the high-priority goals that agencies have set thus far "leave much to be desired" because they are overly technical and focus on activities more than results.

The memo also requires agencies to begin considering new high-priority goals that will be included in the fiscal 2013 budget. Thereafter, the goals must be updated every two years.

"Goals should be chosen that are outcome-oriented with stretch targets relative to available resources," the memo stated. "Agencies should highlight efficiency gains in the goal statement."

The budget document also must include a list of all reports that agencies are legally required to submit to Congress, identifying at least 10 percent that are duplicative or outdated. Critics argue the reporting requirements associated with the original Government Performance and Results Act are onerous and often unnecessary.

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Office of Special Counsel finally has new leader

Robert Brodsky — Fri, 15 Apr 2011 00:00:00 -0400

The Senate on Thursday evening confirmed by unanimous consent the nomination of Carolyn Lerner to run the small federal agency charged with investigating allegations of prohibited personnel practices in the civil service. She will serve a five-year term.

Lerner sailed through her confirmation hearing in early March and easily cleared the Senate Homeland Security and Governmental Affairs Committee days later.

Lerner is a founding partner of Heller, Huron, Chertkof, Lerner, Simon & Salzman, a Washington law firm that specializes in civil rights and employment matters for both federal and private sector workers.

She inherits an office that has been besieged by credibility problems in recent years. Scott Bloch ran OSC from 2004 through 2008, when he resigned amid a criminal investigation into allegations he used an IT firm to scrub files from his work computer. Bloch was sentenced to one month in prison in March for withholding information from Congress, but he remains free while his attorney appeals that sentence.

Longtime OSC career official William Reukauf has served as acting special counsel since Bloch's departure.

The Senate confirmed a total of 19 executive nominees on Thursday evening, all by unanimous consent, including the controversial choice of Rafael Borras to be undersecretary for management at the Homeland Security Department. Senators on the Homeland Security and Governmental Affairs Committee were divided over his qualifications and some delinquent taxes.

Boras has been serving in the same role at DHS under a recess appointment for the past year, focusing on evaluating the department's use of contractors and improving its overall acquisition process.

"Mr. Borras has proven himself to be a dedicated and highly capable leader in an incredibly challenging position," said Homeland Security Chairman Joe Lieberman, I-Conn. "He brings tremendous energy and experience to bear on the challenges that face the department as it works to become the highly effective and efficient department we need it to be for the security of all Americans."

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Senator questions contractor compliance with Iran sanctions law

Robert Brodsky — Thu, 14 Apr 2011 00:00:00 -0400

In a letter last week to Comptroller General Gene Dodaro, Sen. Claire McCaskill, D-Mo., chairwoman of the Senate Homeland Security and Governmental Affair's Ad Hoc Contracting Oversight Subcommittee, requested a governmentwide review of prime and subcontractor compliance with the 2010 Iran Sanctions Act and the Comprehensive Iran Sanctions, Accountability and Divestment Act.

The latter bill requires prospective contractors before receiving an award to certify that neither they nor any affiliates are working with a prohibited business in Iran, including any deals to transfer refined petroleum to that Islamic nation. If a company submits a false certification, agencies can terminate the contract and propose the company for suspension or debarment.

McCaskill wants the watchdog to determine how many reports of false certification by agencies have been investigated, the outcome of those investigations and whether companies have been penalized for failing to comply with the law. The letter also asks GAO to determine how many waivers of certification have been requested by agencies and granted by the White House. The president can waive the certification requirement in the interest of national security.

Separately, McCaskill is asking the Defense Department to explain a recent multimillion-dollar contract to Kuwait and Gulf Link Transport, a company she claims has ties to the Iranian government.

The company, whose website says it provides supply chain management services in the Middle East, was awarded a four-year, $157 million Defense Logistics Agency contract in February to provide storage and distribution services for U.S. troops. The contract previously had been held by Agility, a Kuwaiti-based company. But Agility was suspended from government contracts after it was indicted for overcharging the Army on contracts to feed soldiers in Iraq, Kuwait and Jordan.

Kuwait and Gulf Link Transport also have a controversial track record. In 2003, Army Lt. Col. Dominic "Rocky" Baragona was killed in Iraq after his Humvee was struck by a supply truck driven by a KGL employee. Since that time, Baragona's family has attempted to sue the contractor for wrongful death, but KGL has successfully argued U.S. courts lack jurisdiction over the matter.

In 2009, McCaskill introduced legislation that would require foreign companies that agree to work on government contracts to consent to "personal jurisdiction" in U.S. federal courts. The bill did not come up for a vote last year, but McCaskill reintroduced it this year.

"Given KGL's unsatisfactory record of integrity on previous government contracts and the importance of the recent contract award to U.S. military efforts, I have serious concerns regarding KGL's current compliance with United States laws, regulations, and policies related to Iran," McCaskill wrote in a letter last week to Defense Secretary Robert Gates.

McCaskill also wants the Defense Department to determine whether KGL, or any other Pentagon contractor, has current dealings with Iranian businesses that have been designated by the Treasury Department as involved in activities related to the proliferation of weapons of mass destruction.

Last July, Rep. Brad Sherman, D-Calif., and then- Rep. Ron Klein, D-Fla., wrote to Gates highlighting a joint venture between KGL and a al Fajr Valfajr, a business controlled by the Islamic Republic of Iran Shipping Lines that had been placed on Treasury's Specially Designated Nationals and Blocked Persons list for allegedly engaging in weapons proliferation.

KGL responded by telling the Army Legal Service Agency's Procurement Fraud Branch that it was in the process of divesting itself of any business interests related to the Iranian shipping line. The company argued it was not engaged in any activities for which sanctions could be imposed by the Iran Sanctions Act or the Comprehensive Iran Sanctions, Accountability and Divestment Act.

McCaskill, however, remains unconvinced. She told Gates that KGL "may have business" in another Iranian government company, Hafiz Darya Shipping Co., which also has landed on Treasury's blocked person's list. The Defense Department inspector general is investigating the relationship between the two companies, she said.

The senator wants Gates to provide information by May 4 on the steps Defense has taken to determine whether KGL has complied with Iran sanctions laws and divested itself of business interests owned or controlled by the Islamic Republic of Iran Shipping Lines.

A Defense spokeswoman said a response to McCaskill's inquiry is under way.

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Senate committee votes to streamline confirmation process

Robert Brodsky — Wed, 13 Apr 2011 00:00:00 -0400

The 2011 Presidential Appointment Efficiency and Streamlining Act, which cleared the Senate Homeland Security and Governmental Affairs Committee in an afternoon vote, would no longer require a confirmation hearing for many noncontroversial positions, including more than 100 part-time advisory board members.

The other positions that would no longer require Senate confirmation were selected because they are not involved in developing policy or setting budget priorities and already report to a Senate-confirmed official, according to Committee Chairman Joe Lieberman, I-Conn. They include many communications and legislative affairs officials at agencies throughout the government.

Also included on the list is the position of Office of Management and Budget comptroller, a spot that Danny Werfel currently holds. The comptroller helps sets agency financial reform policies, including the collection of improper payments.

Sen. Robert Portman, R-Ohio, a former OMB director, opposed the inclusion of agency chief financial officers among positions that would no longer need confirmation. The Senate Rules Committee could consider changing the bill and eliminating those spots before a final vote on the floor, Lieberman said.

Under the proposed bill, the Senate still would require confirmation for 1,200 policymaking positions and senior officials.

The legislation also would create a working group charged with improving the speed and efficiency of background investigations of administration nominees. For example, an electronic system would be created to distribute background information from nominees to congressional committees, the White House and the FBI, potentially eliminating weeks of delays, lawmakers said. The working group would consider using personnel other than the FBI to conduct background checks for individuals as well.

The measure has the support of a bipartisan group of 20 former lawmakers and White House operatives who have studied streamlining the federal appointment process for the nonpartisan Aspen Institute.

In addition, the committee voted on Wednesday to approve the nomination of Rafael Borras to serve as undersecretary for management at the Homeland Security Department.

Other legislation approved in block by the committee includes:

The 2011 Federal Acquisition Institute Improvement Act, which reforms the management and oversight of government's training academy for civilian contracting professionals. The measure, http://www.govexec.com/dailyfed/0411/041111rb1.htm>introduced last week, would require the Federal Acquisition Institute to report directly to OMB's Office of Federal Procurement Policy. The FAI director would be appointed by the OFPP administrator and report directly to the office's associate administrator for acquisition workforce.
The 2011 Government Charge Card Abuse Prevention Act would establish higher safeguards and internal controls for agencies that issue and use federal purchase cards.
The 2011 Independent Task and Delivery Order Review Extension Act would extend the sunset date for protests on task and delivery order contracts through September 2016.

A scheduled vote on a bill to reform the Federal Protective Service, which protects 9,000 federal buildings nationwide, was canceled due to a lack of quorum.

The 2011 Supporting Employee Competency and Updating Readiness Enhancements for Facilities Act, would require FPS to hire 146 additional full-time employees. A similar bill that was introduced in the 111th Congress would have added 500 additional employees, but the measure did not pass.

The legislation also calls on FPS to increase its guard training, establish procedures for retraining or terminating ineffective guards and to establish performance-based standards to detect explosives and other threats at federal facilities.

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Recovery Act reporting becoming the norm

Robert Brodsky — Tue, 12 Apr 2011 00:00:00 -0400

Since October 2009, more than 75,000 prime recipients of Recovery Act funds, including contractors, state governments, universities and nonprofits, have submitted quarterly reports on their stimulus spending to the Recovery Accountability and Transparency Board. New data from the board show that through the most recent reporting period, which ended in December 2010, only 366 spending reports, or less than 0.5 percent, remain outstanding.

"That's good news to the recovery and to taxpayers," Chairman Earl Devaney wrote in a column posted on the board's website. "Most recipients, it is clear, accept the idea that if they take taxpayer dollars, they have a legal and ethical obligation to report on their spending."

The Recovery Act requires all prime recipients of agency stimulus funds to file a spending report outlining how they are using the funds and the number of employees detailed for the work, at the end of each calendar quarter.

The new figures represent a startling turnaround for the relatively new reporting program. In the initial reporting cycle, covering the period from March to October 2009, 4,359 recipients did not comply with the reporting requirement. In the second reporting period, which closed in January 2010, the number of non-reporters declined to 1,036, representing $583 million in unaccounted-for stimulus funds.

Devaney attributed the subsequent improvement in compliance, in part, to the board's strategy of embarrassing and then punishing those recipients who failed to file spending reports.

In February 2010, the board published a list of "two-time losers" on its website, Recovery.gov, highlighting recipients who had failed to file reports in the initial two periods.

And in April 2010, the Obama administration issued a presidential memo authorizing agencies to begin terminating the awards of noncomplying recipients, reclaiming unspent funds and potentially suspended or debarring those contractors or grantees from future awards.

Among the companies that have faced stiff punishment for their noncompliance was Sunland Industries LLC, a California-based women-owned small business. The company has repeatedly failed to file a report on a $229,000 award the National Parks Service issued in September 2009 to provide road materials to Lava Beds National Monument in Northeastern California, Devaney said. Sunland subsequently was suspended from government work, and the Interior Department inspector general has recommended a permanent debarment. The issue is under review, he said.

The board has not collected data on the total number of recipients that have been suspended or debarred, according to spokesman Ed Pound.

As of Jan. 31, the board and the agency inspectors general have received 5,703 complaints of wrongdoing associated with Recovery Act funds. More than 1,100 complaints have triggered active investigations, according to figures on the website.

At least one company, Eyak Technology LLC, an Alaska native corporation-owned small business with offices in Virginia, has argued that it does not have to file a spending report. Eyak initially was awarded a $1.1 million contract by the Homeland Security Department Customs and Border Patrol in September 20008 -- before passage of the Recovery Act -- to upgrade communication sites in Maine. The following year, DHS modified the contract and added a $656,960 task order using Recovery Act funds.

When the company claimed it did not legally have to report its spending on the task order, CBP attempted to pull back the Recovery Act funding. Eyak filed suit, claiming breach of contract. The case is now pending at the U.S. Civilian Board of Contract Appeals.

Eyak spokeswoman Melissa Zelinger said the company is not challenging the reporting requirements in general but is arguing that CBP "unlawfully used [American Recovery and Reinvestment Act] funds on the contract in question and therefore no ARRA reporting was required." The firm said the agency was prohibited from using Recovery Act funds on an existing contract unless it first modified the contract to incorporate a clause from the Federal Acquisition Regulations regarding the use of ARRA funds on the award. "The agency never modified the contract to incorporate the required FAR clause," Zelinger said. "Because the FAR clause was never incorporated into EyakTek's contract, the agency could not lawfully use ARRA funds and ARRA reporting requirements were not required by EyakTek. Given the emphasis on transparency of the use of Recovery Act funds, EyakTek would not agree to report when, in its opinion, the ARRA funds were unlawfully used by the agency." Eyak is believed to be the only Recovery Act recipient to argue in court that it is not required to file a spending report, Pound said.

For other recipients, the excuses for not reporting have run the gamut. Dell Federal Systems LP cited "clerical oversight" as the reason it did not report for two consecutive quarters on a $150,699 contract. Tampa Ship LLC, meanwhile, blamed its lapse on its staff's failure to renew a required government registration form. The best excuse, Devaney said, was a recipient who claimed to be "unexpectedly pulled out of the office for some out-of-town meetings for several days and was unable to connect laptop to a wireless connection.''

"The way I look at it, there are no good excuses for failing to report to taxpayers," Devaney said. "Recipient reporting is at the heart of the board's accountability program. You can be certain we will keep up the pressure on the relatively few recipients who ignore their reporting obligations."

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Legislation would reorganize Federal Acquisition Institute

Robert Brodsky — Mon, 11 Apr 2011 00:00:00 -0400

The 2011 Federal Acquisition Institute Improvement Act, introduced last week, would require that the school, through its board of directors, report directly to the Office of Management and Budget's Office of Federal Procurement Policy.

The FAI director would be appointed by the OFPP administrator and report directly to the office's associate administrator for acquisition workforce, the bill stated. The current hiring process is less formal, with consultation by General Services Administration, OFPP and FAI's board of directors.

GSA now oversees the institute, although OFPP has a role choosing its leadership. The new bill would give OFPP a more active management role in running FAI.

All civilian agency training programs at the institute -- including acquisition internship programs -- would follow OFPP-issued guidelines, ensuring consistency in training standards, according to the legislation. The OFPP administrator would report annually to Congress on FAI's projected budget needs and expense plans.

Established in 1976 under the Office of Federal Procurement Policy Act, the Federal Acquisition Institute is charged with training and developing the skills of the federal acquisition workforce. Critics say FAI has been underutilized because it lacks organizational clarity, is not funded as well as the more entrenched Defense Acquisition University and is only intermittently used by federal agencies.

"This legislation would make the federal government more efficient and saves tax dollars," said Rep. Gerry Connolly, D-Va., who introduced the bill in the House. "In the past decade, federal procurement spending grew by 155 percent while the acquisition personnel managing that spending grew by just 10 percent. We just don't have the workforce to manage large, complex contracts and the Federal Acquisition Institute is not meeting our training demands."

Sen. Susan Collins, R-Maine, the bill's lead sponsor in the Senate, noted legislation is needed for the acquisition workforce to keep pace with the massive growth in federal contract spending during the past decade.

"This level of spending requires professionally trained and invested acquisition personnel who can manage these huge expenditures while also guarding against the possibility of waste, fraud and abuse of taxpayer dollars," Collins said. "The Federal Acquisition Institute Improvement Act would strengthen the FAI, which promotes career development and strategic human capital management for the entire civilian acquisition workforce."

The Senate measure is co-sponsored by Sens. Daniel Akaka, D-Hawaii; Claire McCaskill, D-Mo.; and Scott Brown, R-Mass. A similar version of the legislation passed the Senate in the 111th Congress last December, but did not receive a vote in the House.

The bill also would provide enhanced and more consistent training for thousands of civilian contracting officers. FAI would be required to keep current governmentwide training standards and certification requirements and modify the programs when core competencies are not covered. In addition, career path information would be developed to encourage contracting officials to stay in federal positions for decades to come. The human capital efforts would be coordinated with the Office of Personnel Management.

To help standardize training for civilian and Defense acquisition employees, the Bush administration in 2005 moved the Federal Acquisition Institute to the campus of the Defense Acquisition University in Fort Belvoir, Va.

The Senate legislation is scheduled for a vote on Wednesday, April 13, by the Senate Homeland Security and Governmental Affairs Committee.

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Shutdown could spell trouble for contractors

Robert Brodsky — Fri, 08 Apr 2011 00:00:00 -0400

A shutdown would prevent contractors from being paid for most services. They would be unable to renew expiring awards, or even enter the federal facilities where they had been working.

As of Friday morning, however, agencies could not provide details on the number and types of contracts that would be halted during a shutdown.

Energy Department spokeswoman Stephanie Mueller said, "Even if much of the government is shut down, we expect to continue performance of contracts and financial assistance instruments for a limited time."

The Defense Department, the largest procurer of goods and services in the government, did not immediately provide data on contracts that will be affected during a shutdown. But in a message to Pentagon personnel on Thursday, Deputy Secretary of Defense William J. Lynn III said, "Generally, contractors performing work on contracts funded prior to a shutdown, whether supporting excepted activities or not, may continue working and will be paid out of the obligated funds, subject to further direction from the contracting officer."

Defense contractor personnel are expected to report to work on Monday, April 11, to be briefed on their status, Lynn said.

For their part, many federal contractors declined to comment on their shutdown preparations, or if their particular contracts had been halted yet.

According to a survey conducted by the Small and Emerging Contractors Advisory Forum, an industry association representing more than 400 small and midsize firms, a government shutdown would have minimal effect, at least in the short run. Fifty-five percent of respondents reported they would operate as usual during a shutdown while 38 percent suggested they would ask employees to use personal leave during that period.

Meanwhile, 14 percent of respondents said they would send employees to training with time and costs paid by the company and 5 percent said they would be forced to dock pay across-the-board for all employees, the survey found.

A shutdown's impact on contractors likely would depend on its length -- a few days versus several weeks--and the size and diversity of the company, according to John Cooney, who served as deputy general counsel for litigation and regulatory affairs at the Office of Management and Budget during the Reagan administration.

Most large and midsize companies likely would be insulated from the effects of a short-term shutdown because they have existing revenue and liquidity to rely on, Cooney said. But small firms with only one contract might not be able to maintain their entire staff and overhead during a potential shutdown, he said. "This could put real pressure on their finances," said Cooney, now a regulatory and constitutional attorney at Venable LLP.

While some small businesses could find themselves in difficult financial straits if they cannot receive payment from the government, the world's largest federal contractor is fully prepared for a shutdown.

"Our facilities will remain open," Lockheed Martin Chairman and Chief Executive Officer Bob Stevens said in a memo to staffers on Thursday. "We will continue to pay you. Your benefits will remain in force. We currently have no plans to furlough anyone."

In the event of a shutdown, goods and services funded through annual appropriations cannot be purchased, unless they are in support of excepted activities -- including the safety of human life, or the protection of federal property -- or are funded through sources other than annual funding.

For example, an agency could continue to obligate funds if:

The money is not limited to a single year (weapons systems contracts typically contain multiyear funding);
Statutes expressly permit obligations;
Spending is necessary to perform specific essential duties, such as issuing Social Security checks;
Money is needed to terminate operations in an orderly way.

In these instances, a contractor, much like excepted federal employees, will be paid only after an appropriations bill has passed, according to a memo Office of Management and Budget Director Jacob "Jack" Lew issued on Thursday.

Companies with fixed-price awards generally are safe as these contracts often are paid in advance, allowing a company to continue providing the service. Programs with revolving funds that do not rely on congressional appropriations -- such as the General Services Administration's Public Buildings Service -- likewise would be exempt from a shutdown.

"Contracting personnel should consult with program and legal personnel before making a final decision not to exercise an option, when this could expose the government to financial liability, or other damages," GSA wrote in a directive issued on Friday.

But companies relying on cost-plus and time-and-materials contracts, in which funding is provided incrementally, could begin receiving notices immediately from agencies that there has been a "lapse in funding" and work on the contract should be halted immediately.

Cost-type contracts generally include a "limitations of funds" clause that would serve as a de facto stop on most work. Time-and-materials contracts, which are based on incurred costs, also would not be funded. While indefinite delivery-indefinite quantity contracts would remain valid, no new orders could be placed.

The government legally does not have to provide firms with any advanced notice if it plans to halt a contract due to a lack of funds, said Alan Chvotkin, vice president and counsel of the Professional Services Council, a contractor trade association. While formal documentation eventually will be required, the initial notification that a contract is being halted can be informal; a phone call from a contracting officer will suffice, Chvotkin said.

This process is inherently different from the more formal issuance of a stop-work order, or terminating a contract "for convenience," he said.

Vendors, meanwhile, would be expected to cease work immediately on their contracts when notified by an agency. Activities associated with shutting down contracts likely would be billable to the government, according to industry and agency officials.

"The government may provide the contractor with additional specific instructions on how to proceed to shutting down operations," Chvotkin said. "It is understandable that the contractor will incur expenses in shutting down operations and those reasonable and allocable expenses are compensable through a claim that the contractor is required to file."

In their respective shutdown guidance issued on Friday, several agencies noted the government is legally obliged to pay costs incurred with shutting down contracts and grants.

In some circumstances, previously funded contracts conceivably could continue without any federal procurement staff to oversee the work. The OMB memo noted, "During a funding lapse, the performance by contracting officers, contracting officer technical representatives, contract administration personnel, and grants management specialists of routine oversight, inspection, accounting, administration, payment processing, and other contracting or grant management activity would generally not continue."

But the absence of the procurement staff does not necessarily mean the contract would grind to a halt. "If the continued supervision or support, during the lapse period, is not critical to the contractor's or grantee's continued performance during that period, then the contractor or grantee may continue to proceed with its work," Lew wrote.

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Whistleblower protections get another chance in Senate

Robert Brodsky — Fri, 08 Apr 2011 00:00:00 -0400

A bipartisan contingent of senators has reintroduced legislation to provide better protections for federal whistleblowers.

The 2011 Whistleblower Protection Enhancement Act is virtually identical to the legislation that narrowly missed passage last December, when an anonymous senator blocked it on the last day of the 111th Congress.

In the only change to last year's version, the new law would strike an exception to whistleblower protection for minor, inadvertent violations of law. "That exception attempted to codify an exception created by Federal Circuit case law, but there were concerns raised about whether the exception is appropriate and whether the provision inadvertently went further than current case law," said Jesse Broder Van Dyke, spokesman for Sen. Daniel Akaka, D-Hawaii, the bill's lead Democratic sponsor.

Akaka first sponsored a whistleblower bill in 2000 and has reintroduced the measure every Congress since then. "This bill strengthens the Whistleblower Protection Act and restores congressional intent that whistleblowers be protected from retaliation," Akaka said. "This protection is crucial to efforts to improve government management, cut the deficit, protect public health and safety, and to secure the nation."

The new measure would strengthen the 1989 Whistleblower Protection Act, most notably by suspending for the next five years the U.S. Federal Circuit Court of Appeals sole jurisdiction over federal employee whistleblower cases. That court rarely has ruled in favor of federal whistleblowers. Alleged victims of whistleblower retaliation now would be able to seek a jury trial anywhere in the country.

The legislation also would extend whistleblower coverage for the first time to 40,000 Transportation Security Administration baggage screeners, along with federal scientists. And the bill would end a provision in existing law that protects only "the first" person who discloses the misconduct. The bill also would clarify that disclosures of waste, mismanagement, fraud, abuse or other illegal activity are protected, but not disagreements over policy decisions.

In addition, the act would give the Office of Special Counsel the authority to file friend -of -the court briefs to support employees appealing Merit Systems Protection Board rulings. MSPB would be required to file annual reports on the outcomes of whistleblower cases, and an experimental whistleblower ombudsman position would be created to advise employees of their rights in offices of inspectors general. The board also would be provided with authority to consider and grant summary judgment motions in certain cases.

In a move likely to strike some controversy, the bill once again includes whistleblower protections for national security and intelligence community employees, who would be given an administrative appeals process to provide legal and safe channels for disclosures of wrongdoing. An identical provision was cut from the version that the House passed last year, ultimately leading to the bill's undoing in the Senate.

The Senate passed a prior version of the whistleblower bill by unanimous consent in 2007. The House passed a similar bill, but the chambers were unable to work out their differences before the 110th Congress adjourned.

Federal watchdogs and whistleblower advocates called on Congress to finally pass the measure.

"Quick passage of this bill would signal that Congress is serious about tackling waste and saving taxpayer dollars," said Angela Canterbury, director of public policy at the Project on Government Oversight. "Federal workers are on the front lines for witnessing waste, fraud and abuse. They need safe, legal channels for making legitimate disclosures and adequate protections for looking out for the rest of us." ]]>

Exclusive survey: Feds don’t know whether they'll be furloughed

Tom Shoop, Erin Dian Dumbacher, and Robert Brodsky — Thu, 07 Apr 2011 00:00:00 -0400

This story has been updated. More than half of federal managers and employees surveyed Wednesday said their agencies had not shared plans with them for implementing a shutdown of operations if funding for government agencies runs out Friday night -- and nearly as many didn't know whether or not they would be subject to a furlough.

A total of 56 percent of the 1,200 people who responded to the survey said their agency had not shared a shutdown plan with them, although almost one quarter -- 24 percent -- expected to receive notification of a plan this week. Many federal agencies began notifying their employees of their respective contingency plans throughout the day on Wednesday.

More than half the respondents said they did not know whether they would have to report to work during a shutdown. Twenty-three percent said they knew they would be excepted from a furlough and would be on the job. Many workers said the lack of information and direction from agency leadership has become frustrating.

"There's been no confirmation," one respondent said. "I'm a little concerned that we're three days away and I have no idea how I should react to the news on Saturday morning. This is becoming a long-term stressor."

The email survey of 1,200 federal managers and employees was conducted by Government Executive's research arm, the Government Business Council, on Wednesday afternoon. Virtually all the respondents were civilian federal employees, covering a host of agencies. More than 27 percent of those who completed the survey worked for the Defense Department or one of the military service agencies. Most respondents indicated they were at the GS-12 level or higher, and nearly half manage one or more direct reports.

The survey showed that agency morale is taking a hit as a result of the protracted budget battle. A plurality of respondents -- 48 percent -- rated morale at their agency as "low" or "very low." Only 13 percent considered their agency's employees to be motivated right now.

"People are working hard to get their work complete before a shutdown occurs, but they feel unappreciated and scared about paying bills," one respondent explained.

One-third of federal managers believed it is likely they will receive retroactive pay for the shutdown period. A full 44 percent were less optimistic and believed it is either "unlikely" or "highly unlikely" that they will receive back pay for the shutdown period. That opinion was echoed on Wednesday by Rep. Jim Moran, D-Va., who said furloughed employees should not expect to receive back pay. Moran's Northern Virginia district is home to tens of thousands of federal workers and contractors.

"Furloughed employees received back pay in 1996, but the political climate was not nearly as polarized and federal employees had not been so thoroughly demonized and dehumanized in the political rhetoric as we have of late," one employee said.

Others were holding out hope that the economic consequences of at least 800,000 federal workers going unpaid, and therefore not spending their money elsewhere, would motivate Congress to provide reimbursement.

"I don't believe Congress can risk the financial fallout from not paying federal employees," a respondent said. "We have mortgages, car payments, utility bills, etc. that will not wait just because inept congressional folks cannot do their job."

A little more than 45 percent of those surveyed said they would cease all use of agency-issued mobile devices, such as laptop computers and BlackBerrys, in a shutdown, with another 40 percent saying their agencies had not provided such devices to them. Nearly half of respondents said they would cease all contact with their colleagues during a shutdown.

If a shutdown occurs, respondents said they would hold Congress most to blame. Survey takers, who were allowed to choose more than one option, pinned most of the fault -- nearly 66 percent -- on congressional Republicans, while almost 51 percent pointed the finger at Democrats. Forty-four percent blamed the Tea Party and 40 percent held the White House responsible.

No matter who is at fault, most agreed federal workers should not be victimized by the stalemate. "Cutbacks are a necessity, I agree," one worker said. "But politicians should not ask the federal workforce to bear the weight of bad decisions made by politicians."

More than 22 percent of respondents identified themselves as Republicans, compared to less than 21 percent as Democrats. The remainder identified themselves as either Independents, from another party, or declined to answer.

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Agencies told to begin furlough notifications

Robert Brodsky — Thu, 07 Apr 2011 00:00:00 -0400

memo to agency officials released on Thursday by the Office of Management and Budget.

Agency leadership should tell employees if they will be considered "exempt" and allowed to continue working, or if they will be furloughed if the existing temporary budget law expires at 11:59 p.m. on Friday, the memo from OMB Director Jacob "Jack" Lew said.

Agencies are encouraged to issue furlough notices electronically.

Lew said agencies must complete the notification process no later than the close of business on Friday, which will be considered a "normal workday" for employees.

"We know that the current uncertainty and threat of a shutdown is a tremendous burden on federal employees and therefore, earlier this week, we encouraged agencies to reach out to all employees regarding the possible lapse in appropriations," he wrote.

Agencies also are encouraged to immediately reach out to stakeholders, such as federal labor unions, state, local and tribal governments, grantees, contractors, and congressional committees to discuss their contingency planning, he wrote.

"We're taking these steps because responsible management demands it," OMB Deputy Director Jeffrey Zients said during a White House press briefing. "We still hope that we do not have to execute the plans, but we are prepared to implement if necessary." If funding lapses, then federal workers, including those who are furloughed, will be allowed to perform up to four hours of work on their next scheduled workday to conduct orderly shutdown activities.

"Ordinarily, furloughed employees should take no more than three or four hours to provide necessary notices and contact information, secure their files, complete time and attendance records, and otherwise make preparations to preserve their work," Lew wrote.

Nonexempted employees who are scheduled to telework on their next scheduled workday will be allowed to perform these shutdown activities from their telework location. Agencies also can allow other nonexempt employees to conduct these shutdown activities from a remote location if those tasks can be done quickly -- in an estimated 15 minutes -- even if they were not scheduled to telecommute. Such activities would include receiving and acknowledging receipt of an electronic furlough notice, and updating voicemail and email responses to reflect their current work status, the memo stated.

Agencies will have the discretion to decide if furloughed employees must turn in their work-issued BlackBerrys, cellphones or laptops, or if they simply should be instructed to cease to use the devices during a shutdown.

"Orderly shutdown procedures should not rely on mobile devices or home access to work email for providing notices of when to return to work," the memo said. "Agencies have discretion to enforce these access restrictions in light of their own particular needs. Some may choose, for example, to include in orderly shutdown activities a requirement that furloughed employees turn in their BlackBerrys until they return to the office; others may determine that circumstances warrant a different approach."

Agencies also will have some leeway in dealing with employees on temporary duty assignments away from their normal duty stations. Those workers are encouraged, OMB said, to make arrangements to return home sooner than anticipated "wherever reasonable and practicable. However, agencies should make a determination of reasonableness and practicality based on the length of the assignment and the time required for return travel, compared to the anticipated length of the lapse, so as to minimize the burdens of doing so."

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No back pay for furloughed feds predicted

Robert Brodsky — Wed, 06 Apr 2011 00:00:00 -0400

Rep. Jim Moran, D-Va., whose Northern Virginia district is home to tens of thousands of federal workers and contractors, expects agencies to issue at least 900,000 furloughs if a budget deal is not worked out by 11:59 p.m. on Friday.

A senior administration official pegged the expected furlough total at closer to 800,000 -- roughly the same number issued during the 1995 government shutdown. But during that shutdown, the Defense Department was exempt from furloughs because Congress already had passed the Pentagon's appropriations bill. If the government stops operations this week, civilian Defense officials will not be spared, the official said.

During past shutdowns, furloughed federal employees have been paid for their time, whether they were deemed essential or not. But back pay must be approved by Congress, and given the record-breaking federal deficit and the mood of Tea Party Republicans, Moran does not expect that pattern to continue.

"Federal employees need to understand this is not 1995, when we closed down and they did not go to work and they were fully reimbursed," Moran said in a Wednesday conference call with reporters hosted by the National Active and Retired Federal Employees Association. "I have a very strong conclusion after talking with some of these guys there will be no reimbursement."

Excepted personnel -- including uniformed military members -- who are deemed essential because they perform functions necessary for the safety of human life and protection of federal property, will be paid retroactively for work, the senior administration official said.

The impact of a shutdown, particularly if it lasts for several weeks or months, could be devastating for many federal employees. "It will have a very severe impact upon federal employees' ability to make their mortgage payments and car payments," Moran said. "This is very, very serious."

It's not just the lack of a paycheck that will hurt employees. Louis Bornman, a GS-13 operations research analyst with the Army in Fort Leavenworth, Kan., plans to retire this summer. But a furlough -- he expects to be deemed nonessential -- would reduce his retirement savings, which is based on the highest average pay an employee earned during any three consecutive years of service. These are typically the final three years of service.

"I will be paying for this forever," Bornman said.

A shutdown also could be devastating to many small businesses who rely on payments from the government, Moran said. "Small contractors are holding on by their fingernails, and some will likely fall off the cliff," he said. "There will be a number of small contractors that will go out of business."

Agency leaders began notifying staff on Wednesday about their shutdown contingency plans. The Office of Personnel Management also has provided guidance on furlough-related questions on its website.

The notification to civilian agencies said, "Should it become necessary to implement our contingency plans, you will receive formal notice from your supervisor no later than Friday, April 8 regarding the designation of your position and furlough status."

But the notification process could be slower at some Defense Department agencies. For example, employees at the Defense Contract Audit Agency were informed that if the government shuts down, they should arrive at work on Monday morning, April 11, to learn their status.

"At your office, you will find senior supervisors will have divided mission-essential functions -- those in direct support of warfighting operations or property protection -- from nonmission-essential functions," J. Philip Anderson, DCAA's assistant director of resources wrote in a message to staff. "Mission-essential positions, and the staff assigned to them, are designated 'excepted.' All others are nonexcepted. All nonexcepted personnel will receive from their manager or supervisor a letter explaining that they are now on furlough. Then these personnel will depart work in a controlled but timely manner. All personnel will be paid for the day on 11 April."

The memo said DCAA would finalize its list of excepted and nonexcepted employees after receiving final guidance from Defense Secretary Robert Gates' office.

Furloughed DCAA workers will not be able to use their agency-issued BlackBerry devices and any previously approved leave time will be immediately canceled, the memo said. "If an excepted person is on leave, they will become nonexcepted and will not be paid for leave during a furlough," Anderson wrote.

Agency personnel deployed to combat regions will be considered excepted personnel. Other overseas personnel face the potential of furloughs, the guidance said.

"It is very demoralizing to think you're going to be laid off and not paid," Bornman said. "People will have to work harder in the near future because time requirements don't change. This ultimately will cost the government more money."

Federal labor unions have been pressing the Obama administration to be more forthright about shutdown contingency plans. But Wednesday's guidance from civilian agencies was insufficient for Colleen Kelley, president of the National Treasury Employees Union, who wants to notify her members as quickly as possible about potential furloughs. "There are still a lot of unanswered questions," she said.

The union said it would be working with agencies to ensure that the notification process and the method for determining an excepted employee "are the most effective and comprehensive as possible."

Moran's staff plans to host a town hall meeting in Virginia on Thursday evening to discuss the impact of the shutdown on the federal workforce, contractors and the local economy. The meeting will take place from 7:30 to 9 p.m. at the Francis C. Hammond Middle School, located at 4646 Seminary Road in Alexandria. The event is free and open to the public.

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Shutdown preparations begin

Robert Brodsky — Tue, 05 Apr 2011 00:00:00 -0400

This story has been updated.

With less than three days before the current fiscal 2011 continuing resolution expires, the Office of Management and Budget has instructed agency leaders to begin prepping their workforce for a potential government shutdown.

"We are encouraging you to communicate with senior managers throughout your organizations as appropriate to ensure you have their feedback and input on plans to date," OMB Deputy Director Jeffrey Zients wrote in a memo on Monday to agency deputy secretaries and chiefs of staff. "These communications should be focused on the logistical and managerial issues related to a potential shutdown to ensure that managers are prepared to implement your shutdown plans should the need arise."

The memo, first reported by The Washington Post, is a major tactical shift by the White House, which up until now had stuck to a script that downplayed the potential for a government shutdown. But with funding for the fiscal year set to expire at 11:59 p.m. on Friday, April 8, a harsh reality appears to be setting in.

"Given the realities of the calendar, good management requires that we continue contingency planning for an orderly shutdown should the negotiations not be completed by the end of the current CR," Zients wrote.

White House press secretary Jay Carney said on Tuesday morning that it would be "irresponsible not to go through the motions … that are on the books and have been on the books since the 1980s toward preparing for a situation where funding is cut off."

At an afternoon press briefing with reporters, Carney said OMB would share more details later this week on which portions of the government would continue to operate in the event of a shutdown. He would not address the question of how many federal employees could potentially face furloughs if an agreement is not reached.

The Obama administration still has not instructed agencies to release copies of their individual shutdown guidance spelling out which employees would be deemed "essential" and allowed to continue working during a shutdown and who would be ordered to stay home, potentially without pay.

The contingency plans, Zients wrote, are still being refined and updated. "We know that the current uncertainty and threat of a shutdown is a tremendous burden on federal employees, and are very much aware that a shutdown -- should it occur -- would impose hardships on many employees," he wrote. "We are continuing to monitor the status of negotiations, and will work with you to best prepare the hard-working men and women of our workforce for any contingency."

Federal labor unions, meanwhile, have called for the contingency plans to be released immediately. "With a potential government shutdown just days away, it is imperative that federal employees and their union representatives gain access to these documents," National Federation of Federal Employees President William Dougan wrote in a letter to Obama on Tuesday. "It is detrimental to the morale and overall well-being of the workforce to withhold these plans any longer."

Also on Tuesday, Rep. Dan Lungren, R-Calif., chairman of the Committee on House Administration, ordered his colleagues to draw up lists of Capitol Hill staffers who will be furloughed in the event of a shutdown.

House and Senate leaders met with President Obama and Vice President Biden on Tuesday morning to discuss the budget. The meeting did not lead to an agreement, and House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., scheduled another meeting for Tuesday at 4 p.m. If an agreement is not hammered out, Obama said, he would expect all parties to resume meetings at the White House on Wednesday.

Speaking with reporters on Tuesday, Obama said the White House had more than met Republicans halfway in their negotiations. "We are now closer than we have ever been to getting an agreement," Obama said. . "There is no reason why we should not get an agreement."

Boehner has argued that the cuts the White House has offered are not sufficient.

"If everyone is reasonable," an agreement is still within reach, Carney said. The spokesman suggested that rather than make steep cuts in education and medical research, as House Republicans have proposed, the funding bill should eliminate earmarks for transportation projects and cuts in military spending.

"We've demonstrated our willingness to come a long way and accept cuts that in an ideal world we would not accept," Carney said. "And I think the American people expect all sides to move off their starting position to settle for less than their perfect world in the name of doing the business of the American people."

One last-ditch effort to avoid a shutdown, however, appeared to come up short. House Republicans proposed a one-week continuing resolution that would have cut $12 billion in government spending and funded the Pentagon for the remainder of the fiscal year. But House Majority Leader Eric Cantor, R-Va., told reporters on Tuesday that the White House rejected the measure.

Obama countered that his administration already had approved two short-term spending resolutions in recent weeks and that incremental budgeting "is not a way to run a government." The president said if an agreement were reached in the coming days and Congress needed additional time to file the necessary paperwork, he would sign a "clean" continuing resolution [without any cuts] to keep the government operating.

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Unions rally troops to head off shutdown

Robert Brodsky — Mon, 04 Apr 2011 00:00:00 -0400

The National Treasury Employees Union and the National Federation of Federal Employees, which combine to represent 260,000 agency workers, on Monday announced plans for a Federal Employee Call-In Day.

All federal workers, their families and friends are being urged to contact their respective member of Congress on April 5 to voice opposition to a shutdown and to $61 billion in budget cuts passed by the Republican-controlled House. The unions said they would provide participants with a script they could follow for the calls, which are supposed to take place on the employees' free time.

"Our message is that Congress must do its job for federal employees to do their job," NTEU President Colleen Kelley said in a conference call with reporters. "It's as simple as that. I think that phone calls from thousands of federal employees can change the debate on this issue. Federal employees know better than anyone the detrimental impact a government shutdown and unrealistic budget cuts would have on the essential services the American people rely on."

Unless Congress agrees to a budget for the final six months of fiscal 2011, the existing continuing resolution will expire at 11:59 p.m. Friday, April 8, and the government will shut down. Hundreds of thousands of federal employees will be furloughed, and key services, including food safety inspection and tax preparation, will be dramatically curtailed, the unions said.

During the five-day government shutdown in 1995, Internal Revenue Service employees, including those processing tax returns, were furloughed, NTEU officials said. With two weeks until the April 18 tax deadline, a government shutdown could have dramatic implications for processing returns, Kelley said.

"This is an untenable situation," she said. "It's a distraction for the employees trying to do the work of the government. It's also forcing agencies to put so many actions on hold like hiring and training."

Obama administration officials have repeatedly declined to speculate on which federal employees would be deemed "essential" and be allowed to work during a shutdown.

A government shutdown would be particularly devastating to hundreds of thousands of federal employees -- roughly 85 percent of who live outside Washington -- and their broader communities, said NFFE President William Dougan.

He pointed to the Red River Army Depot in rural East Texas, which serves as the largest and highest-paying employer in that immediate area. Dougan noted furloughs would not only devastate depot employees and their families, but also would have serious impact on nearby supermarkets, restaurants and hardware stores that rely on government workers for much of their business. A shutdown lasting several weeks could lead small businesses to begin laying off workers, or possibly closing their doors altogether.

"The ripple effect of a government shutdown could very easily spread throughout the entire country, given the fragile economic recovery we are experiencing," Dougan said.

While the unions were harshly critical of House Republicans' proposed cuts to agency services, the labor groups also saved some venom for the administration, which has kept them in the dark about their shutdown preparations.

The Office of Management and Budget has refused to allow agencies to release any shutdown guidance spelling out which employees would be allowed to continue working during a shutdown and who would be ordered to stay home, potentially without pay.

When prodded by the unions and the news media, the administration has repeatedly said agency plans are not yet final and not ready to be released. The unions, however, argued that administration officials are playing politics and remaining deliberately secretive, in part because they do not want to engage in a discussion about which employees will be deemed "essential."

"From our perspective, federal employees are being held hostage because these plans are not being made available," Dougan said. "It's disrespectful to keep these folks in limbo until the last minute."

OMB did not respond to a request from Government Executive for comment on Monday about the status of the shutdown plans.

Another key unanswered question is whether furloughed federal employees would be paid during a shutdown, as they were in past stoppages. Congress would have to approve those payments and, given the budget deficit and mood of Tea Party Republicans, Dougan seemed doubtful. "It's a crapshoot," he said. "This issue is still up in the air."

The union has begun collecting the phone numbers of its members to set up a text messaging system in the event of a shutdown. Some federal employees, Kelley speculated, still might be asked to come to work next Monday, even without a budget passage, to initiate an "orderly shutdown."

Last week, another federal labor union, the American Federation of Government Employees, issued detailed guidance to its members, calling for major concessions from the administration in the event of a shutdown. AFGE wants furloughed federal employees to receive retroactive administrative leave, continued health care benefits and the opportunity to seek temporary employment elsewhere. NTEU and NFFE, however, have yet to seek similar concessions.

The NTEU is offering additional information about Tuesday's call-in on its website.

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Contracting preferences for Alaska native corporations under threat

Robert Brodsky — Fri, 01 Apr 2011 00:00:00 -0400

The senator this week introduced a measure that would put Alaska native corporations on equal procurement footing with other companies operating in the Small Business Administration's 8(a) Business Development Program, which helps small and disadvantaged firms gain access to federal and private procurement markets.

"The American people have made it clear they want us to cut back federal government spending and at this point it's really a question of how much," said McCaskill, chairwoman of the Senate Subcommittee on Contracting Oversight.

"I think the one thing we can all agree on is that we should start with waste and abuse," she said. "Contracting practices that aren't providing taxpayers with the best bang for their buck should be first on the chopping block."

ANCs date back to the 1971 Alaska Native Claims Settlement Act, which created 13 regional corporations and more than 200 village corporations. Eligible citizens from each region were given shares in their corporation's stock, allowing them to benefit from ANC profits. McCaskill complains of pervasive abuse in the program and said the corporations fail to employ sufficient numbers of Alaska natives and return only minimal benefits to the people the program was intended to help.

ANC advocates argue it is unfair to compare them to other small businesses that operate under a model designed to benefit individual entrepreneurs. The corporations reinvest some of their profits in the native population through their shareholders. ANCs also spend profits on cultural and social programs that benefit the larger Alaskan community, proponents said.

McCaskill's amendment would eliminate the ANCs' ability to receive sole-source contracts of unlimited value. All other 8(a) firms have their noncompetitive contracts capped at $4 million, or $6.5 million for manufacturing. A new rule change published last month requires agency contracting officers to provide written justification when awarding sole-source ANC contracts in excess of $20 million. The approval documentation then would be public.

The amendment also would prevent Alaska native firms from automatically being designated as socially and economically disadvantaged. The companies would have to prove that status upon entering the 8(a) program. The corporations also would have to be managed by individuals who qualify as economically and socially disadvantaged. The program currently allows the corporations to be managed by non-natives, often from locations in the Washington metropolitan area.

Under McCaskill's proposal, an ANC would be allowed to have a majority interest in only one 8(a) subsidiary at a time and that affiliate's size would be a factor in determining the ANC's program eligibility. In addition, the firms would be prohibited from operating as pass-through entities to deliver contracts to non-native companies.

The restrictions would apply only to ANCs and not native Hawaiian organizations or corporations owned by native tribes, all of which are provided the same contracting preferences. The provision is likely to face stiff resistance from the Senate's Alaskan delegation, which is feverishly protective of ANC rights.

McCaskill's amendment and the bill -- the 2011 Small Business Innovation Research/Small Business Technology Transfer Reauthorization Act -- are currently being debated by the Senate and could be up for a vote early next week. A longtime critic of the preferences for ANCs, McCaskill has introduced identical legislation as a stand-alone measure before. Rep. Bennie Thompson, D-Miss., introduced a companion measure in the House.

An additional amendment to the SBIR/STTR Reauthorization Act, which seven Republican senators sponsored, would rescind all unspent and unobligated stimulus funds. The provision was offered by Sens. Olympia Snowe of Maine, John Thune of South Dakota, Marco Rubio of Florida, Scott Brown of Massachusetts, Mike Enzi of Wyoming, Jerry Moran of Kansas, and David Vitter of Louisiana.

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Former OSC Scott Bloch sentenced to one month in prison

Robert Brodsky — Thu, 31 Mar 2011 00:00:00 -0400

Magistrate Judge Deborah Robinson also sentenced Bloch, the former head of the Office of Special Counsel, to one year of unsupervised probation and 200 hours community service. But Robinson did not immediately order Bloch to prison, as the sentence will be appealed.

Bloch's attorney, William Sullivan, said he would file a motion to keep Bloch out of prison until the U.S. Court of Appeals can weigh in on the case. Robinson said she will consider the request. She will also consider a request from Sullivan that Bloch serve the one-month sentence in home confinement.

The sentencing previously had been delayed nine times as Bloch's attorneys, along with federal prosecutors, attempted to reconcile the statute and sentencing guidelines.

Bloch pleaded guilty in April 2010 to one count of criminal contempt of Congress -- a misdemeanor carrying a sentence of up to six months in prison -- relating to allegations he used an IT firm to "scrub" files from his work computer.

Defense attorneys and federal prosecutors have long supported Bloch's request for probation, arguing that he did not have a criminal history and faced sanctions to his law license. But in February, Robinson ruled that language in the criminal contempt of Congress statute required Bloch to be sentenced to a minimum of one month in prison.

Defense attorneys attempted to withdraw the guilty plea, arguing Bloch did not know the charge carried a mandatory prison term. Earlier this year, Robinson issued a ruling rejecting that request, noting that Bloch was aware when he pleaded guilty that the court could issue a harsher sentence than that recommended by prosecutors.

The sentence was celebrated by government watchdogs. "The contempt of Congress charge is just one of the many lowlights of Mr. Bloch's time as the head of the Office of Special Counsel," said Danielle Brian, executive director of the Project on Government Oversight. "Considering all that Mr. Bloch did to make a mockery of his position, it's fitting that he'll have some time to reflect about his misdeeds in a federal prison."

The case dates back to December 2006, when Bloch allegedly directed the computer repair firm Geeks on Call to scrub files from his office computer, as well as those of two other political appointees. At the time, Bloch was being investigated by the inspector general of the Office of Personnel Management on allegations that he improperly retaliated against former employees.

The FBI raided Bloch's home and office in May 2008. Five months later, the White House forced him out of his job.

Prosecutors alleged in court filings that Bloch "unlawfully and willfully withheld pertinent information" about the deleted files from House Oversight and Government Reform Committee staffers during a March 2008 interview.

If the sentencing is not overturned, Bloch, who currently works at the law firm of Tarone & McLaughlin in Washington, faces the potential revocation of his law license from the District of Columbia Bar Association.

Bloch's likely successor, Carolyn Lerner, awaits a Senate vote on her confirmation.

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Politics and FOIA combine for combustible mix at hearing

Robert Brodsky — Thu, 31 Mar 2011 00:00:00 -0400

In a heated and highly partisan hearing on Thursday, Republican lawmakers repeatedly accused DHS officials of delaying or obstructing potentially embarrassing documents from being released to the news media, Congress and watchdog groups.

Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., argued the department's policy of allowing political appointees to review certain requests for records before public release "reeks of a Nixonian enemies list, and this committee will not tolerate it."

Committee Republicans released a 153-page report on Wednesday that found that copies of all "significant" FOIA requests were regularly routed for review by DHS Secretary Janet Napolitano's political staff.

Beginning in September 2009, career staff in the FOIA Office were not permitted to release responses to these requests without approval from political staff, according to the report, part of an eight-month investigation by Republican congressional staff.

Democrats on the panel, however, argued DHS' policy, while inefficient, fell well short of Issa's "extreme accusations."

"We found no evidence that DHS withheld any information for partisan political purposes," said Rep. Elijah Cummings, D-Md., the committee's ranking member. "We found no evidence that FOIA requestors received different treatment based on their political affiliation. And we found no evidence that DHS officials implemented the FOIA process to advance partisan political objectives."

The GOP members' report also was criticized by DHS General Counsel Ivan Fong, who argued the investigation "painted an unfair and irresponsible portrait" of his staff.

The political review policy, which has been in place since 2006, has since been revised to make it more timely and efficient, DHS officials testified.

The dispute centers on several hundred FOIA requests that the department deemed "significant," either because they involve ongoing litigation, relate to "sensitive topics," involve presidential or agency priorities, or came from the media. In these instances, DHS political officials were required to review the requests to better "engage the public on the merits" of the policy issues, said Mary Ellen Callahan, DHS' chief privacy officer.

But Callahan said no documents were withheld or redacted during this review process. "I am not aware of a single case in which anyone other than a career FOIA professional or an attorney in the Office of the General Counsel made a substantive change to a proposed FOIA release," she said. "To my knowledge, no information deemed releasable by the FOIA Office or the Office of the General Counsel has at any point been withheld and responsive documents have neither been abridged nor edited."

While the department's inspector general agreed with Callahan's conclusion in a report released this week, it also found that political officials played an "unprecedented" role in reviewing FOIA documents. The IG found that FOIA requests were repeatedly subject to lengthy and unnecessary bureaucratic delays the IG said were the antithesis of the Obama administration's policy on openness and transparency in government operations.

"While the department has a legitimate need to be aware of media inquiries, we are not persuaded that delaying a FOIA release so that officials can prepare for expected inquiries is the best public policy," said acting IG Charles Edwards. "Again, the problem is that some of these inquiries unnecessarily delayed the final issuance of some FOIA responses."

The IG's report found that inquiries and suggestions from political appointees often delayed the release of documents by several weeks, in some cases violating the statutory deadline to complete requests within 20 business days. Many of the delays, Edwards said, were caused by DHS appointees who expressed concern about correcting typographical and grammatical errors in cover letters.

"The information we received demonstrates that the review process created inefficiencies in the FOIA process," he said. "Such inefficient oversight of significant requests before release led to statutory noncompliance or prolonged delays in some cases. Additionally, various individuals who reviewed significant cases, including senior DHS officials, had little to contribute to the department's disclosure program."

Callahan acknowledged the delays and said they "did not meet my standards." The department now has created an intranet system in which FOIA requests can be immediately shared with political officials rather than relying on email. Political appointees are allowed only one business day to object to the release of the documents based on nine provisions in the FOIA law that exempt certain information from public release.

The controversy was first raised by a DHS whistleblower, Catherine Papoi, a former deputy unit chief in charge of FOIA. Issa asserted that Papoi was retaliated against after complaining to the IG that political appointees were interfering with FOIA requests. Issa accused DHS leadership of improperly demoting Papoi after she met with Issa's staff.

DHS officials said Papoi was under consideration for a senior executive position, which eventually went to another, more experienced employee. That decision, officials said, was made several months before Papoi met with Issa's staff.

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SBA considering mandating set-asides on multiple award contracts

Robert Brodsky — Wed, 30 Mar 2011 00:00:00 -0400

Currently, agencies are not required to, and they often are discouraged from setting aside small businesses task and delivery orders that are placed against multiple award contracts. But the Small Business Jobs Act, signed by President Obama in September 2010 instructs SBA and the Office of Federal Procurement Policy to develop guidance that would reverse that policy.

To further its policy deliberations, SBA met with hundreds of small business owners on Wednesday in Manhattan as part of its Small Business Jobs Act tour. The event, one of 13 scheduled in locations across the country in March and April, is designed to provide the public with information about the provisions in the legislation, including 19 focused on contracting.

Arguably the most important, and potentially difficult to implement, provision would dramatically alter how agencies use the GSA schedules and IDIQ contract vehicles, which now represent 28 percent of the federal procurement marketplace. In 1990, IDIQs represented just 14 percent of the total contracting dollars spent by agencies.

SBA and OFPP have held five outreach events in recent months seeking feedback from the public on the best way to implement this provision. The crux of the issue, according to Joe Jordan, associate administrator for government contracting and business development at SBA, is whether to mandate small business set-asides on multiple award and IDIQ contracts, or to allow agencies the discretion to use them.

"We need to get the 'shall' versus 'may' language right," he said.

SBA's decision could make the difference in whether the government finally meets its small business contracting goals. In fiscal 2009, small businesses won 21.9 percent of all small business contract dollars, amounting to $96.8 billion. To meet its 23 percent goal, agencies would have to spend roughly $5 billion more on small businesses, Jordan said.

Mandating small business set-asides could push agencies over that threshold. About $40 billion in contracts was awarded last year off GSA's Multiple Awards Schedule, and another $150 billion was spent governmentwide through IDIQ contracts.

But the Obama administration also is weighing whether a mandate would discourage agencies from using these contracts, particularly the GSA Schedules. One possible solution, Jordan said, is developing a hybrid solution in which agencies could be required to set aside task-and-delivery orders if they do not meet their small business goals. The agencies that are meeting those goals then would be allowed, but not forced, to use the set-asides.

"The question is how to make this happen without taking away from the speed and efficiency," he said.

The jobs act also establishes a mentor-protégé program to assist small businesses owned by women, service-disabled veterans and those operating in Historically Underutilized Business Zones in competing for contract opportunities. The initiative would be modeled after the 8(a) mentor-protégé program and also take into account the staffing and resources SBA has devoted for these programs, Jordan said.

But these new joint ventures bring possible perils, including opening the door for mammoth contractors, such as Lockheed Martin Corp. and Boeing Co., to begin winning a high percentage of contracts that are intended for small businesses.

"How do we balance that?" Jordan asked. "These can't be pass-throughs. We can't let companies play that way."

SBA expects to submit a proposed rule creating the mentor-protégé programs by the end of May.

Other job act contracting provisions include:

Requiring OFPP to establish a governmentwide policy for contract bundling -- a process in which several small contracts are consolidated and awarded to one firm, often out of the reach of small businesses. (Before bundling a contract, procurement officials would be required to conduct market research and to have a senior acquisition official sign off on the decision. The rationale for bundling then would be publicly disclosed, either on a federal database, or on the agency's website. )
Establishing a pilot program for collaboration and joint ventures involving small business contractors. (Under the five-year program, $5 million in federal grants will be awarded to nonprofit groups that would then collaborate with small business teams seeking to compete collaboratively for larger procurement contracts. Thus far, 80 to 90 grant proposals have been received, and SBA expects to choose from 10 to 20. Proposals must be received by April 11.)
Mandating small businesses to recertify their size status annually. The law also establishes a governmentwide policy for prosecuting companies that fraudulently disclose themselves to be a small business. (The policy would allow an agency to keep the product or services the fraudulent company provided and still sue the business for the entire sum the agency paid through the contract.)
Requiring SBA to re-examine its size standards in each of its business categories every five years.

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Defense employees bear heavy burden in efficiency plan

Robert Brodsky — Tue, 29 Mar 2011 00:00:00 -0400

As part of a departmentwide efficiency initiative, military service agencies have identified roughly $100 billion in savings from fiscal 2012 through 2016, funds that will be reinvested in high priorities, including increasing combat capacity. An additional $78 billion in departmentwide savings will be used to reduce the federal deficit.

Senior military officials tasked with implementing the efficiency plan appeared before the Senate Armed Services Subcommittee on Readiness and Management Support, offering the broadest explanation to date on how the savings will be achieved and in some cases reinvested.

For example, a freeze on hiring across the department -- with the exception of increases in the acquisition workforce -- through fiscal 2013 will save $13 billion, according to Pentagon figures. Another $12 billion will be saved by freezing civilian pay scales in fiscal 2011 and 2012. And roughly $8 billion will be pared from Defense health programs during the next years by better managing medical cost growth and raising TRICARE fees for working-age retirees.

An additional $11 billion will be saved by reducing overhead, staffing and expenses and through more-efficient contracting and acquisition.

In total, of the $78 billion the department will save, $68 billion will be achieved by shedding excess overhead; improving business practices; changing economic assumptions and reducing personnel costs, including cutting senior leadership positions; and reducing the total size of the Army and Marines Corps, officials said.

"I have never seen such far-reaching business streamlining," said Defense Comptroller Robert Hale.

But service contractors, by contrast, face more modest cuts. The department said it will save $6 billion by reducing staff support contractors by 10 percent per year for three years. For example, the offices of undersecretary of Defense for policy and for acquisition, technology and logistics will cut a combined 270 contractors. The TRICARE Management Activity will cut more than 780 contractors, and the Missile Defense Agency will trim its contractor head count by 360.

Subcommittee Chairman Sen. Claire McCaskill, D-Mo., argued that civilian employees are bearing an unfair burden. She calculated that in fiscal 2012, civilian employees would face $4.5 billion in cuts as compared with $1.3 billion for contractors. "Is that really the best we can do?" McCaskill asked.

Even with the $78 billion in cuts, the Defense budget is expected to rise. The department requested $553 billion for its base budget in fiscal 2012, and it is expected to grow to $611 billion in fiscal 2016, Hale said.

Across the military services, the Army achieved $29.5 billion in savings, in part by consolidating six installation management command regions into four and closing the Evaluation Task Force at Fort Bliss, Texas, which was created to assess the now-restructured Future Combat System. This action will make 1,000 servicemen and women available for other duties at that post, said Army Undersecretary Joseph Westphal.

The Navy, for its part, achieved $35 billion in savings. It cut personnel at 290 shore commands, achieved efficiencies in acquisition and disestablished the 2nd Fleet in Norfolk, Va.

And the Air Force achieved about $33 billion in overhead savings through changes to force size and personnel, consolidating two Air Operations Centers in the United States and another two in Europe and implementing sounder business practices.

Even as the department implements its efficiency plan, officials testified that the lack of a permanent budget is having the opposite effect. Without a guaranteed source of funding, contacting officers are signing more short-term contracts and deferring other acquisitions, Hale said. The Navy, meanwhile, is delaying major ship repair while other service agencies have put construction projects on hold.

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