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Contract cons can exploit Transportation delay
The federal government’s system of suspending transportation contractors can be so fraught with delays that companies still can compete for contracts in the months or years it takes for regulators to decide whether to blacklist the businesses.
The U.S. Department of Transportation took 10 months to decide to suspend several people after they were charged in a bribery case in Kentucky, according to an audit by the transportation inspector general.
The findings mark the latest government review to highlight a persistent area of concern in federal contracting, as agencies across government scramble to spend hundreds of billions of dollars in economic stimulus funds while ensuring that the money doesn’t end up in the wrong hands.
Similar concerns arose last year when the House Committee on Oversight and Government Reform held hearings titled “How Convicts and Con Artists Receive New Federal Contracts.” A 2009 report by the Government Accountability Office (GAO), citing cases in several agencies, concluded that “businesses and individuals that were excluded for egregious offenses were continuing to receive federal contracts.”
“Now more than ever, with so much stimulus money being spent, it’s essential the government protects its interests,” said Neil Gordon, an investigator with the nonpartisan Project on Government Oversight, which monitors federal spending and contracting practices.
Mr. Gordon said a lack of staff in agencies’ suspension and debarment offices, coupled with less than clear guidelines, contributed to the problem.
Robert Burton, a partner with the Venable LLP law firm and a former deputy administrator of the Office of Federal Procurement Policy, said the problems in suspension and debarment practices run across government.
“Procurement spending has increased from $200 billion at the beginning of the decade to well over $500 billion at the end of the decade, and so there are going to be more instances of waste and abuse,” Mr. Burton said. “But one of the concerns is whether agencies are using suspension and debarment properly and aggressively.”
On average, transportation officials took more than 300 days to reach a suspension decision and more than 400 days to reach a debarment decision, according to the inspector general’s report.
Suspensions and debarments are official actions to ban companies from competing for contracts. While suspensions are temporary, often pending the outcome of an inquiry, debarments are permanent or imposed for a set period of time.
Among other causes, the inspector general blamed the delays on “unnecessary and lengthy reviews before deciding cases ….”
“Not only do these delays put the [Department of Transportation] and other federal agencies at risk of awarding contracts or grants to parties who should be suspended or debarred, but they also create funding risks that could impact the effective and efficient use of funds …,” the report concluded.
Transportation officials acknowledge problems but said they have “ramped up resources” to better handle suspension and debarment cases, according to a letter responding to the inspector general from Linda J. Washington, assistant secretary for administration in the Transportation Department.
Transportation Department spokesman Bill Adams also said Tuesday that the Federal Highway Administration (FHWA), where several of the problems were found, enacted a revised set of protocols, including plans to issue suspension and debarment orders within 45 days of being notified about a contractor’s indictment.
“The new administration takes the issue of suspension and debarment very seriously,” he said.
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