Contracting system beset by problems

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President Obama is set to outline contracting reform measures Wednesday morning aimed at saving U.S. taxpayers $40 billion a year. For some background on the plethora of problems besetting the federal procurement process, you can read the special project I wrote in October.

One fact I pointed out then was that a 2007 House Oversight Committee report found “‘significant waste, fraud, abuse or mismanagement’ in federal contracts worth a total of $1.1 trillion” from 2002 to 2006.

Some highlights from the article:

In the view of the Government Accountability Office (GAO) — the auditing and investigative arm of Congress — the Pentagon’s hunger for increasingly complex weapons and computer systems has made it particularly vulnerable to wasteful spending.

But similar problems exist in other security-related departments and agencies — including the Department of Homeland Security and the FBI — whose responsibilities and funding have ballooned since Sept. 11.

In one widely publicized case, the FBI contracted out for a new computer system in 2000 but changed the scope of the project after Sept. 11. As a result of complications and confusion, the program was scrapped in 2005 at a loss of $170 million to the taxpayer.

The FBI’s procurement specialists were so ignorant of the technology required to build such a system that they were “largely at the mercy of the contractors,” an inspector general’s report found.

A lack of digital literacy also tripped up the Transportation Security Administration, a branch of Homeland Security that in 2002 called for a national high-speed computer network.

Its procurement specialists initially estimated the cost at $1 billion but later told auditors they had no idea what it would cost because they did not know how it would work. A few years later, the estimate had risen to between $3 billion and $5 billion.

The Homeland Security Department’s inspector general’s office also found that overbilling by contractors contributed to the overrun.

The federal government “has never had a greater need for agility, but has never seemed so thick with bureaucracy,” said Paul Light, a New York University professor who studies good governance. “It has never had a bigger budget, but has never been so short on the resources to do its job.”

At the president’s fiscal responsibility summit last week, a small discussion among lawmakers on the contracting issue provided some of the more interesting debate of the day. Sen. John McCain was one of the more vocal critics of the process, saying that contracts should be a fixed price and not allowed to constantly be raised.

— Jon Ward, White House reporter, The Washington Times

Follow me on Twitter // jward@washingtontimes.com // Read my latest articles here // My YouTube channel

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