Friday, March 19, 2010

Government Continues to Award Contracts to Poor Performing Contractors

Yesterday, the House Committee on Oversight and Government Reform held a hearing to examine the Government's suspension and debarment process. The impetus for the hearing was recently published audits of AID, DOT and DHS that showed the Government continued to award contracts to companies who were ineligible to receive them because those companies had been suspended, debarred or had otherwise engaged in misconduct.

In his opening statement Committee Chairman Edolphus Towns noted that the suspension and debarment rules are intended to prevent "the incompetent and the unproductive, the con men and the frauds" from receiving Government contracts and grants until they "clean up their act". The problem that Towns noted was that the Government was not using the tools at its disposal, allowing poor performers to "rake in millions".

In one case, it took the Department of Transportation 300 days to reach a suspension decision and 415 days to process the decision when it should have taken 45 days total. During that time, the company received $24 million in new contracts. Another contractor admitted to filing more than 100 false claims and eventually paid back $1.3 million to USAID while continuing to receive additional contracts.

The testimony by managers from DOT, USAID, and DHS were the typical "mea culpa, didn't happen on my watch, we'll do better in the future" blather you would expect to hear in these kinds of hearings. Their words were certainly not inspiring nor were there any tangible suggestions for ensuring future compliance with existing rules and regulations.

To read more about this hearing or to watch it, go here.

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