- The Washington Times - Monday, September 29, 2014

Investigators have recommended the government bar a Virginia company that employs a who’s who list of former powerful federal officials from getting contracts after they found employees at the Department of Veterans Affairs improperly tried to steer business to the firm.

The VA’s inspector general said in a scathing report that Susan M. Taylor, deputy chief procurement officer for the Veterans Health Administration, “continually” lied about her dealings with FedBid, the well-connected reverse auction company whose advisers and employees include two former top White House procurement officials, a general and a former congressman.

Ms. Taylor and FedBid officials sought to “thwart” a VA contracting official who had grown increasingly concerned about reverse auctions, citing costs and complaints from suppliers, investigators found.

When the same VA contracting official enacted a moratorium on reverse auctions two years ago, FedBid moved swiftly, plotting to discredit the official, according to the report released Friday. One of FedBid’s financiers, Steve Case, also personally interceded on the company’s behalf with former VA Secretary Eric K. Shinseki, warning that the federal agency could see “reputational damage,” investigators found.

FedBid handles most of the federal government’s reverse auctions. It’s a form of procurement where sellers, not buyers, compete. Proponents say competing sellers drive down prices, though FedBid also gets a fee from the transactions.

But last year, the Government Accountability Office questioned the $98 million in savings that FedBid said its reverse auctions booked in 2012 for four agencies that congressional auditors reviewed individually.

Either way, the recommendation that FedBid be debarred from VA contracts represents a serious threat to the company, with many former Defense Department and federal acquisition officials among its advisers and employees. FedBid also enlisted former Texas Rep. Chet Edwards, a Democrat, to help FedBid fight the moratorium, according to the report. He forwarded an inquiry to his attorney, who declined to comment Monday.

“VA will review the evidence collected by the IG to determine whether that evidence is sufficient to support accountability action against the employee,” VA spokeswoman Genevieve Billia wrote in an email. “If the evidence is sufficient, accountability action will be proposed. If the evidence is insufficient, VA’s Office of Accountability Review (OAR) will immediately commence its own administrative investigation.”

The inspector general’s office passed along its findings to the Department of Justice, which declined to prosecute.

That decision confounded Rep. Jeff Miller, Florida Republican and chairman of the House Committee on Veterans’ Affairs. He said the report documented “extensive unethical — if not illegal — behavior.” He also said the inspector general’s report built on his committee’s own investigation into VA’s use of reverse auctions in 2012 and last year.

“I thank the Office of the Inspector General for its thoroughness in this instance,” Mr. Miller said, “but, at the same time, I must express my extreme disappointment with the Department of Justice for refusing to prosecute what appear to be clear violations of the law.”

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