Posted at 01:33 PM ET, 09/11/2009

Government Inc. Signing Off For Now

The Washington Post has been taking stock of its Web offerings in an effort to make the best use of its resources. Many blogs will be suspended for the foreseeable future, including Government Inc. More than 300 Government Inc. postings will remain available at as archives.

Readers with story tips or thoughts about federal procurement and fraud, waste and abuse of tax dollars should feel free to contact Robert O'Harrow Jr. or other Post reporters, at 202-334-6000.

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Posted at 02:15 PM ET, 07/13/2009

Government Inc.: Summer Break

Government Inc. is taking a short break, in part to contemplate the state of federal procurement.

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Posted at 12:12 PM ET, 07/10/2009

Outright Corruption Alleged by Justice Department

"In the autumn of 2005, a mutual friend introduced Pamela Banks to a burly ex-Marine named Gary Alexander, at the time a high-ranking official at the secretive SPAWAR military research facility in San Diego.

"Alexander had a simple proposition. He could get Banks hired as a subcontractor on government projects through his position at SPAWAR, and get her all the work she would want.

"In return, Alexander asked for one thing: a 30 percent cut of the revenue generated from the contracts.

"Banks agreed, according to federal court records. She set up a small company in her San Diego home dubbed Advanced Technical Solutions and over the next two years reeled in $325,000 in subcontracts for SPAWAR work."

That's the top of a story this week in the San Diego Union-Tribune. It's based on a recently unsealed Justice Department indictment of people who worked as senior officials in the Navy program and their alleged confederates in the contracting world.

The indictment describes a sordid kickback scheme -- a subversion of the public trust. Here's more from the story in the Union-Tribune.

"Investigators placed wiretaps on the phones of the Alexanders and others in the ring centered at SPAWAR and observed meetings where cash was handed over to Alexander, Assistant U.S. Attorney Robert Ciaffa said in court yesterday.

"Alexander, 49, was the head of SPAWAR's Air Surveillance and Reconnaissance branch, a position prosecutors said he used to steer work to contractors and subcontractors in exchange for cash and gifts.

"Also indicted were Louis Williams, 43, and his wife, Elizabeth Ramos, 42, who own a National City-based firm called Technical Logistics Corp. That company garnered about $4.8 million in government contracts between 1999 and 2008.

"Sinthia Nares, 43, also was indicted in the scheme and prosecutors say, is allegedly Alexander's mistress, for whom he secured lucrative jobs at various contracting firms.

"A sixth defendant, Jackie Godwin, was a manager at Kratos Defense & Security Solutions, a San Diego defense company that was a primary contractor with SPAWAR. He is alleged to have directed subcontracting work to the companies Banks, Ramos and Williams ran at Alexander's direction. Godwin is in custody in Georgia and is on his way to San Diego to face charges.

"Though it spanned years, investigators were alerted to the alleged scheme in late 2007 with an anonymous tip to a federal fraud hotline."

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Posted at 01:49 PM ET, 07/ 9/2009

Contractors Must Check For Immigrant Status

Looks like E-Verify is going to happen after all.

Starting Sept. 8, federal contractors will have to participate in a broad effort to crack down on illegal immigration by confirming that employees are allowed to work in the U.S.

Department of Homeland Security Secretary Janet Napolitano announced the Obama administration's support of the decade-old program on July 8.

That mandate, requiring contractors to use the system known as E-Verify, has been delayed repeatedly. Critics have complained that the system, which verifies that employees have legitimate Social Security numbers, often gets it wrong. Napolitano said the system has improved.

"Requiring those who seek federal contracts to use this system will create a more reliable and legal workforce. The rule complements our Department's continued efforts to strengthen immigration law enforcement and protect critical employment opportunities. As Senator Schumer and others have recognized, we need to continue to work to improve E-Verify, and we will.

"The federal contractor rule extends use of the E-Verify system to covered federal contractors and subcontractors, including those who receive American Recovery and Reinvestment Act funds. After a careful review, the Administration will push ahead with full implementation of the rule, which will apply to federal solicitations and contract awards Government-wide starting on September 8, 2009."

A story by Washington Technology's Alice Lipowicz included these thoughts:

"Implementing the mandatory E-Verify system has been postponed four times, first in January. White House officials said they needed more time to review a pending lawsuit brought by the U.S. Chamber of Commerce that challenged the constitutionality of mandatory E-Verify use by federal contractors, which had started as an executive order by President George W. Bush.

"Under Bush's executive order, about 168,000 federal contractors were to begin mandatory use of E-Verify starting this January. The order applies to federal contracts valued at more than $100,000 and subcontracts worth more than $3,000.

"The lawsuit challenging the rule is pending in the U.S. District Court for the District of Maryland. Co-plaintiffs with the chamber are the Society for Human Resource Management, the Associated Builders and Contractors, the HR Policy Association, and the American Council on International Personnel. Chamber officials were not immediately available for comment today."

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Posted at 03:10 PM ET, 07/ 7/2009

Contractor With Ties To Murtha Charged By Feds

"A former executive for a Pennsylvania defense firm with close ties to Rep. John P. Murtha (D-Pa.) has been charged with taking bribes from a partner defense company and appears to be cooperating in a federal investigation of Pentagon contracting."

That's the top of a story by our Post colleague Carol Leonnig, who has been closely following a rolling federal investigation of contractors with ties to Murtha.

The case appears to be gaining momentum. It continues to fuel questions about the role that Murtha -- chairman of the House Appropriations subcommittee on military spending -- played in arranging contracts, congressional earmarks and the like for favored companies.

More from Leonnig's story:

"Richard Ianieri, the former president of Coherent Systems International, is accused of taking bribes from officials at a firm the company hired as a contractor. The charges, filed late Monday by the U.S. Attorney's Office in Pittsburgh, came in the form of a filing that typically indicates that the defendant plans to plead guilty and cooperate with investigators.

"The company that allegedly paid the bribes, identified in court filings only as "K," closely resembles Kuchera Defense Systems, which is based in Murtha's congressional district outside Pittsburgh and was a subcontractor to Coherent. Kuchera Defense Systems and its sister company, Kuchera Industries, are under federal investigation for allegations of fraud and overbilling on Defense Department contracts. The probe focuses on companies that benefited from contracts orchestrated or approved by Murtha, the powerful chair of the House Appropriations subcommittee on military spending.

"Defense investigators and the FBI raided Kuchera's corporate offices and the homes of its top two executives January. In late April, the Navy suspended Kuchera for 'alleged fraud,' including 'multiple incidents' of incorrect charging, Navy officials said, along with allegations of defective pricing and ethical violations."

Government Inc. readers may recall that Murtha has been one of the leading practioners of earmarks -- funding that is directed to very particular places.

Federal investigators are examining the extent to which those earmarks are linked to campaign contributions to the powerful lawmaker.

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Posted at 03:33 PM ET, 07/ 2/2009

SAIC, Other Contractors Allegedly Conspired on $3.2 Billion Deal

Two government employees allegedly shared restricted procurement information with SAIC and others on a $3.2 billion NASA contract, giving the contractors an unfair advantage, the Justice Department said.

SAIC said the allegations do not have merit.

The allegations are part of a whistleblower lawsuit that the Justice Department just said it would join.

"The lawsuit, filed in the U.S. District Court for the Southern District of Mississippi, alleges that the defendants knowingly violated the False Claims Act when they submitted (or caused to be submitted) false claims and conspired to submit false claims under a $3.2 billion contract with the General Services Administration (GSA) to provide support services to a branch of the NAVO MSRC. In April 2004, GSA awarded the contract to SAIC, which teamed with AES and Lockheed Martin Space Operations to perform the agreement."

"'Those who do business with the government must act fairly and in accordance with the law,' said Tony West, Assistant Attorney General for the Civil Division. 'As this case illustrates, the Department of Justice will actively pursue legal action against both contractors and federal employees who seek to gain an unfair advantage in the procurement process.'"

SAIC spokeswoman Melissa Koskovich shared this about the developments:

"SAIC has fully cooperated with the Government over the past three years as this matter was reviewed. We have thoroughly examined the Government's claims and found the allegations to be without merit. The Government has been reviewing this matter for three years and has failed to identify any information provided to SAIC that was not available to other bidders or that could have provided SAIC with an unfair competitive advantage in the procurement process. SAIC intends to pursue a vigorous defense against these allegations.

"SAIC is a highly ethical company committed to complying with all applicable laws and regulations. We spend significant time and effort operating a comprehensive and rigorous ethics and compliance program that includes policies, procedures, mandatory training and audit tools. We are proud of our commitment and track record of ethical performance and legal compliance."

This one is interesting. More to come.

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Posted at 12:32 PM ET, 06/29/2009

Alaska Native Corporations Under Scrutiny

Some long overdue scrutiny of ANCs is about to get intense.

Some of you may have seen some trend data recently. It came from the office of Sen.Claire McCaskill in anticipation of a hearing on July 16. Some of the salient points included in a statement her office released:

- "Between 2000 and 2008, contract awards to Alaska Native Corporations increased by $4.6 billion, from $508.4 million to $5.2 billion."

- "In percentage terms, ANC contract spending increased 915 percent from 2000 to 2008, an average increase of 33.6 percent per year."

- "In total, ANCs received $23.8 billion in federal contracts between 2000 and 2008."

You may recall that ANCs occupy a very special place in the federal procurement universe. Formed with the idea of settling native Alaska claims against the federal government -- and helping Native Alaskans to pull themselves out of poverty -- the firms qualify for extraordinary set asides that transcend just about all others.

They're considered "small businesses" but there's no limit on the size of contracts they can receive without competition. They can operate anywhere, so many of them have operations in Washington and across the rest of the lower 48. They often subcontract work on intelligence, technology etc. to traditional Beltway companies. Critics say they're used in effect as pass throughs.

It all adds up to a lot of questions about whether taxpayers are getting what they pay for -- and whether all that money is really helping the people who need it in Alaska.

From the McCaskill press release:

"This information shows that federal government contracts to ANCs have increased dramatically and that ANCs have received a disproportionate share of small business loans. The preliminary analysis also indicates many ANCs are not based in Alaska and most of the work awarded to ANCs, which primarily contract through the Department of Defense, is not performed in Alaska at all."

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Posted at 04:11 PM ET, 06/23/2009

GAO: Radiation Detectors Not Worth It

We have known for some time about the troubles surrounding the national security program intended to prevent bad guys from importing radiological material that could be used to make a nuke or dirty bomb.

What was not entirely clear until now -- in part because of the questioned behavior of people running the Department of Homeland Security's Domestic Nuclear Detection Office -- is whether costly new machines touted as the solution actually worked.

One thing preventing a clear understanding was the fact that DNDO officials allowed contractors to modify their machines, known as Advanced Spectroscopic Portal monitors, during tests in order to boost the appearance of effectiveness. Let's set that aside for now.

Anyway, the answer about whether the machines are worth their cost seems finally at hand. From a story in today's Post:

"The Department of Homeland Security spent three years pushing for a costly nuclear detection system that does not work as billed, while neglecting to upgrade existing equipment that could have helped improve security, according to a new U.S. Government Accountability Office review and an interview with one of the authors."

"The report is the sharpest critique to date of one of the Bush administration's marquee national security programs, and it marks the culmination of several years of struggle by the GAO to determine whether the detectors worked as well as government officials claimed when first promoting the $1.2 billion project in 2006."

Sen. Joseph Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee sought the report. He said it "means the Department of Homeland Security's (DHS) must develop better technology to prevent terrorists from smuggling nuclear weapons across our borders."

Good news: Oversight by the GAO and Congress appears to have prevented the spending of $1 billion on technology that doesn't work as well as needed.

Bad news: Three years have passed, and the country still has very broad vulnerabilities to the importation of radiological materials

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Posted at 10:35 AM ET, 06/17/2009

The Calculus (and Politics) of Stimulus II

A healthy squabble erupted between the White House and Sen. Thomas Coburn yesterday over the benefits and drawbacks of the stimulus spending.

Well, it continues. And now they're getting deep into the weeds. And yet it's still kind of interesting.

As some of you undoubtedly know, the White House issued a report about the achievements of the stimulus spending so far. In short, it said everything was cool.

"In the first 100 days since President Obama signed the American Recovery and Reinvestment Act into law, we have obligated more than $112 billion, created more than 150,000 jobs and helped communities and tribes in every state and territory."

In response, Coburn issued a report yesterday that said, in effect, everything isn't so cool.

Called a "Second Opinion on the Stimulus," its 100 examples of alleged poor or misguided stimulus projects include "nearly $10 million to renovate an abandoned train station that hasn't been used in 30 years" and "10,000 dead people get stimulus checks."

Both sides seemed to play fair until they got to No. 71 on Coburn's list:

"Steam rooms in the fitness center of Laughlin Air Force Base in Texas will undergo repairs funded by federal stimulus funds. According to the solicitation for bids on the project, the total cost is expected to be up to $100,000."

The White House folks had a quick comeback. In their long retort to Coburn's report, they noted that the program actually does not qualify for stimulus funding. They cited No. 71 as one of many factual errors in Coburn's report that undermines its credibility.

"FALSE. This project was not funded with Recovery Act funds."

"Sen. Coburn's report, however, is filled with inaccuracies, including criticisms of projects that have already been stopped, projects that never were approved, and some projects that are working quite well," a White House official said in a statement.

Touche!

But wait. It turns out that that somebody canceled the program at 9:37 yesterday morning, not long before the White House released its response to Coburn. Here's the posting online for the project.

Continue reading this post »

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Posted at 10:55 AM ET, 06/16/2009

The Calculus (and Politics) of Stimulus

Sen. Tom Coburn is offering a GOP counterpoint to a recent White House report that extolled the early successes of the $787 billion stimulus program.

The White House report focused on 100 projects that administration officials believe demonstrate the wisdom of the massive fast-spending effort to jolt the economy back to health.

Coburn's report essentially says "Wait one minute there, fellas." It's called "A Second Opinion on the Stimulus," and it features 100 projects that the senator and his staff believe show the waste and foolishness of some stimulus spending.

An LA Times story this morning says the report "contends the Obama administration's stimulus program is fraught with waste and incompetence -- evidenced by a turtle crossing in northern Florida that will cost more than $3 million and a snafu in which thousands of Social Security checks went out to people who had died."

"Will these projects make real improvements in the lives of taxpayers and communities or are they simply pet projects of politicians and lobbyists that never got off the ground because they are a low priority?" the report says.

The White House has something to say about all this. We'll add it when they say it. For now, from the earlier report:

"Across America, recovery is under way. From the new State of Maine Ferry to a community health center in Mississippi, from classrooms in Florida to the Willamette River Bridge in Washington -- we are using the Recovery Act to jump-start our economy today, while building a new foundation for the sustained economic growth of tomorrow."

We knew the White House would have something to say. Here's a statement we just received from Ed DeSeve, Senior Advisor to the President for Recovery Act Implementation:

"We have approved more than 20,000 Recovery Act projects to get America's economy moving again. The program is, overall, a great success. With 20,000 projects approved, there are bound to be some mistakes - when we find them, we have been transparent about it, and worked on a bipartisan basis to shut them down immediately. Sen. Coburn's report, however, is filled with inaccuracies, including criticisms of projects that have already been stopped, projects that never were approved, and some projects that are working quite well. If Sen. Coburn has found any problematic projects, we will address them immediately - but much of this seems to be little more than an objection to the Recovery Act itself, which Sen. Coburn opposed."

The baton now passes back to the senator, should he care to grab hold. We'll be standing by.



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Posted at 09:19 AM ET, 06/15/2009

CIA Interrogation Contractors Fired

We have known for awhile now that the intelligence community spends up to 70 percent of its budget on contractors. That includes the firms that supply light bulbs, the office chairs and such.

It also includes technology vendors, along with legions of contract analysts, who have been hired to, among other things, examine "open source" content on the Web and other material from around the world.

Now comes another story to remind us how integral contractors have become to the nation's security infrastructure.

"Weeks after President Obama took office, the Central Intelligence Agency extended its contract with a firm run by two psychologists who helped introduce waterboarding and other harsh methods to the agency's interrogation techniques, according to a news report.

"Two months later, CIA Director Leon Panetta fired Mitchell, Jessen & Associates and all other contractors that aided the CIA in its interrogations of alleged terrorists, the New Yorker reported this weekend."

That was from our colleague Walter Pincus. It's a strange experience reading a story with such creepy implications. It's worth keeping track of these kinds of arrangements, both from a contracting perspective, and from the larger perspective of what limits our country will observe in our war on terror.

Are contractors used in these kinds of situations to fuzz out lines of responsibility and accountability?

In the New Yorker, Panetta said he "'didn't support these methods that were used, or the legal justification for why they did it. He also said he supported at one time the creation of a 'truth commission' to look into the subject. But after Obama said in late April that he did not want to look as if he was going after either former president George W. Bush or former vice president Richard B. Cheney, Panetta said, 'everyone kind of backed away from it.'"

Does that mean the president is backing away from getting to the bottom of it because of political concerns? If so, is that the right way to go?

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