The Project On Government Oversight (POGO) is submitting to Congress
a number of actions it should take that would fix many of the systemic
problems that have long plagued the federal government and that spurred
POGO's creation 29 years ago. POGO submitted a similar list to Congress
in 2007, and is pleased to report that Congress made progress
addressing several of the issues we raised. For example, Congress has
passed legislation to create a database that addresses federal
contractor misconduct and established the Senate Ad Hoc Subcommittee on
Contracting Oversight and the Commission on Wartime Contracting in Iraq
and Afghanistan that are trying to fix the broken federal contracting
system.
But
Congress has not adequately addressed many of the important issues we
outlined three years ago. Despite the tireless efforts of a bipartisan
group of Members, Congress has not passed the Whistleblower Protection
Enhancement Act. Nor has Congress reoriented its defense
spending priorities to the troops and national security mission rather
than defense contractors, as evidenced by the numerous earmarks in the
most recent defense appropriations bill, including $2.25 billion for
the C-17 Globemaster airlifters the Department of Defense doesn't want.
And because of such emergent problems as the financial crisis and the
H1NI scare, additional issues have arisen that demand Congress's
immediate attention.
The following are issues we believe Congress should address promptly:
1. Pass Whistleblower Protection Law
Frequently the first people to discover corruption and misconduct
are federal employees. By seeking to fix the problems they uncover,
these employees play a vital role in making sure the government is
accountable and effective. Unfortunately, whistleblowers are almost
always reprimanded, fired, and/or harassed instead of feted, even if
they have not "gone public" and even after their allegations are proven
to be true. The federal Whistleblower Protection Act of 1989 is grossly
inadequate in protecting federal workers and government contractors who
expose waste, fraud, and abuse from retaliation by their supervisors.
Until federal employees can expose wrongdoing without fear of
retaliation, they will lack the incentive to report wrongdoing.
Congress should immediately pass the Whistleblower Protection
Enhancement Act of 2009 (H.R. 1507), the bipartisan bill sponsored by
Rep. Chris Van Hollen (D-MD) and Rep. Todd Platts (R-PA) that creates
strong, comprehensive federal whistleblower protections giving all
federal employees and contractors a functional administrative process
and access to trials.
2. Create an Independent Audit Agency
Auditors are on the front lines of rooting out wasteful spending in
federal agencies. Experience has shown that increased funding for
auditors ultimately results in greater savings for taxpayers, making it
essential for these offices to have the funding, independence,
staffing, and other resources they need to do their job. Unfortunately,
investigations into the General Services Administration (GSA), Minerals
Management Service (MMS) at the Department of the Interior, and the
Defense Contract Audit Agency (DCAA) have found that auditors lack the
independence from their agencies they need to effectively do their
jobs. As a result, auditors' findings have been ignored or altered, and
in some cases have resulted in retaliation or demotion.
Congress should consider establishing an independent federal
contract audit agency. Until then, we hope that Congress provides
rigorous oversight to ensure that agency heads allow auditors to
operate independently, and warn them that officials who interfere with
auditors' independence will be held accountable.
3. Improve Economic Recovery Efforts
Congress has committed $700 billion to the Treasury Department's
Troubled Asset Relief Program (TARP) in response to the subprime
mortgage crisis and the ensuing freeze in the nation's credit markets.
Additional entities such as the Federal Reserve and the Federal Deposit
Insurance Corporation (FDIC) are also lending and guaranteeing
trillions of dollars in public funds to encourage lending and to assist
banks in dealing with mortgage-backed loans and securities. To ensure
the success of these commitments, Congress must take additional action:
- Pass S. 910, sponsored by Senator Mark Warner (D-VA), amending the
Emergency Economic Stabilization Act that adds greater transparency to
TARP by creating a centralized electronic database with real-time
updates on the expenditure of funds. This bill is the companion to one
sponsored by Rep. Carolyn Maloney (D-NY) and Rep. Peter King (R-NY)
that has already passed the House. The database would integrate
information from both public and private sources, including regulatory
filings, internal models, financial models, and analytics associated
with the financial assistance received under TARP. - Close any loopholes in the financial regulatory reform legislation
that would allow some companies to continue trading in over-the-counter
(OTC) derivatives outside of well-regulated exchanges and
clearinghouses. Otherwise, Congress should explain to the public why
unregulated OTC derivatives trading is good for the economy, especially
since the taxpayer-funded AIG bailout was caused in part by that
company's exposure to its OTC derivatives contracts. - Demand that the Federal Reserve and Treasury take a more proactive
role in protecting the government from the conflicts of interest that
are likely to arise from its use of private fund managers for asset
management and valuation in the government's bailout programs.
4. Put the Teeth Back in Financial Regulatory Agencies
In recent months there has been widespread bipartisan agreement
about the need to strengthen the nation's financial regulatory agencies
in order to prevent future economic crises. In particular, the
Securities and Exchange Commission (SEC) and Financial Industry
Regulatory Authority (FINRA) have been failing in their missions to
protect investors from securities fraud.
Congress should reevaluate the government's reliance on FINRA and
other financial self-regulatory organizations (SROs) as frontline
overseers of financial products. FINRA's claim that self-regulation
saves taxpayers money is belied by the fact that taxpayers still have
to pay for the SEC to conduct regular oversight of SROs. FINRA's recent
failure to detect the Bernie Madoff and Allen Stanford Ponzi schemes
should call into serious question whether self-regulators are deserving
of any new regulatory authority.
Congress should also instruct the SEC to fully implement the
hundreds of unimplemented recommendations made by the Inspector General
(IG) over the past two years, which would help address many of the
long-standing systemic problems that have hindered the agency's
effectiveness as a regulator.
5. Uncover the Hidden Costs of Privatizing Government
Under previous administrations, vast swaths of the federal
government have been shifted into the private sector in an effort to
reduce the size of the federal government. From 2000 to 2008, the
amount of federal money spent on contracting increased by over 150
percent-the majority of which is money spent on service contracts. The
great promise that privatizing government would save money by engaging
a more "efficient" private sector hasn't materialized. In fact,
overzealous outsourcing created numerous concerns about whether the
federal government can adequately control its spending and fulfill its
mission. Contractors are now protecting embassies in war zones,
participating in covert intelligence operations, and creating budgets,
public policy, and government programs that are integral to government
missions.
Reversing the trend of outsourcing of government jobs became a hot
issue in 2009. Congress should closely examine the dramatic increase in
the government's use of service contracts and the resultant weakening
of agencies' ability to accomplish their missions and the taxpayers'
ability to hold these agencies accountable. To better track the work of
the federal government, Congress should require all federal agencies to
account for the number of contractor employees working for the
government using a process similar to FAIR Act inventories of
government employees filed by federal agencies.
6. Ensure Taxpayers Get Their Fair Share of Revenues from Royalty Collection
Congress needs to pass legislation that ends the Royalty-In-Kind
(RIK) program. Royalties on oil and gas from our nation's public lands
is one of the largest sources of government revenue. Evidence from the
Government Accountability Office (GAO) and the Interior Inspector
General (IG) suggests that the RIK program is an "honor system" that
likely results in significant royalty underpayments by the oil and gas
industry. In order to ensure that taxpayers are getting their fair
share of income from the country's natural resources, Congress must
pass legislation to make Interior Secretary Ken Salazar's
administrative decision to end the RIK program permanent.
7. Increase Government Accountability and Transparency
The press and the public may play the most important oversight role
in holding the government and its contractors accountable. However, the
tools the press and public need-such as databases being created to
track information about past instances of misconduct by federal
government contractors and to track the revolving door between the
Pentagon and industry-cannot be accessed by the public. Congress should
pass legislation to make both of these databases publicly accessible.
USAspending.gov should become the one-stop shop for government
officials and the public for all spending information. This includes
actual copies of each contract, delivery or task order, modification,
amendment, other transaction agreement, grant, and lease. Additionally,
proposals, solicitations, award decisions and justifications (including
all documents related to contracts awarded with less than full and open
competition and single-bid contract awards), audits, performance and
responsibility data, and other related government reports should be
incorporated into USAspending.gov.
Congress should ensure that basic information about how the federal
government functions be made public, such as a list of how to contact
employees concerning specific matters at each agency. Each agency
should post a calendar for meetings of top-level officials. Similarly,
visitor logs from executive branch policy meetings with lobbyists and
outside groups should be made publicly available at least every three
months, taking into account the need for exemptions for privacy issues.
The public should have online access to a list of all FOIA requests,
which includes links to any documents released as a result of a
request. Similarly, unclassified versions of all IG reports should
become publicly available.
Congress should also ensure that all communications between agencies
and Congress are publicly available, such as responses to inquiries and
reports mandated by Congress.
In the face of the Obama Administration's Open Government Directive,
which mandates increased public access to agency information, Congress
should similarly open its doors. One important step would be for
Congress to make conference reports and marked-up bills publicly
available at least 72 hours prior to the vote.
Additionally, Congress should mark up and pass Senate Resolution
118, which would allow Senators to officially provide public internet
access to all non-classified Congressional Research Service (CRS)
products, some of the best research conducted by the federal government.
8. End Wasteful Defense Spending
The Pentagon has begun to demonstrate an increased willingness to
balance priorities around realistic threats and instill discipline in
weapons acquisitions. Unfortunately, Congress continues to fill the
Defense Appropriations bill with pet projects and earmarks for programs
the Department of Defense (DoD) neither wants nor needs, such as the
C-17. These earmarks divert money away from more urgent national
security priorities. Congress should make sure that Defense
Appropriations bills reflect spending based solely upon national
security needs instead of parochial interests.
Congress must
also make sure that the Pentagon truly is committed to responsible
acquisitions. The Pentagon often issues waivers to key program
milestones and requirements because Congress rarely, if ever, holds
them accountable for failing to follow their own rules. Congress should
use its oversight and appropriations authority to make sure the DoD
does not allow weapons system programs to ramp up production until
after the weapon technology is proven through independent Operational
Test and Evaluation.
9. Make Government Watchdog Organizations More Accountable
Inspectors
General require an extraordinary degree of independence to effectively
perform their duties. But they also need to be held accountable for
misconduct and inadequate work performance. In some cases such
accountability will necessitate that an IG be removed from his or her
post. As demonstrated by recent events, the process of removing an IG
can create a considerable chilling effect on the entire Inspector
General community when the justification for that removal is not fully
transparent.
To ensure that the entire IG community has trust that presidential
decisions to remove IGs are motivated by legitimate causes rather than
retaliation or politics, Congress should amend the Inspector General
Reform Act of 2008 to include a provision that would allow the
President to remove an Inspector General only for cause. The provision
should also require that the President inform Congress in writing of
the full justification for the decision.
10. Drag the Nuclear Complex Out of the Cold War, and Ensure Oversight of Lab Contractors
The people who are running the nuclear weapons complex at the
Department of Energy (DOE) operate as though the Cold War is not over.
Congress should prioritize efforts to secure vulnerable fissile
material around the world and in the U.S., instead of letting the
Administration pour billions of dollars into expanding nuclear
bomb-making materials, weapons, and facilities spread across the
country. For example, the Administration is continuing to store
approximately 250 metric tons of highly-enriched uranium (HEU) in World
War II-era buildings, creating a security risk and requiring billions
of dollars for the construction of new facilities and millions of
dollars for security.
Congress should push DOE to declare as excess and downblend the
growing stocks of HEU into low-enriched uranium which, unlike HEU,
poses no security risk. Furthermore, LEU can be sold as fuel for
nuclear power reactors, generating at least $26 billion in new revenues
for the government. In addition, Congress should look into why DOE has
been dragging its feet in dismantling the thousands of warheads that
have already been declared excess, and are in queue at both Pantex and
the Y-12 National Security complex. Inexplicably, the 2011 budget for
this effort has been cut in half. This funding shortfall both increases
security vulnerabilities and creates unnecessary costs that could
otherwise have been converted to revenue.
Additionally, Congress should conduct oversight of DOE's shift
towards a policy of self-policing for the contractors who manage the
eight facilities that comprise the nuclear weapons complex.
11. Disclose Conflicts of Interest in Scientific Research
One issue that POGO included in its 2007 Baker's Dozen list to
Congress has only partly been addressed. A few years ago, press reports
revealed that a number of researchers at the National Institutes of
Health's (NIH) central facility in Bethesda also served as paid
consultants to drug and biotech companies while they were working for
the federal government. The serious conflicts of interest these
situations caused were resolved by simply abolishing all paid
consulting and other types of payments to NIH's intramural scientists
by private companies. However, many researchers at the nation's medical
schools and universities who receive NIH grants and contracts continue
to consult for private companies.
Congress should ensure that the NIH require its grantees to publicly
disclose their paid arrangements with pharmaceutical companies, as well
as their ownership of relevant stock and stock options, as a condition
of having their medical research funded by the government.
Furthermore, the public would also benefit from greater transparency
in the Department of Health and Human Service's programs, particularly
for vaccine production in a pandemic. The online posting of all
government contracts for vaccine production would be a good place to
start. We urge Congress to press for easy public accessibility to this
information.
12. And of Course: Fix the Broken Federal Contracting System
Since 1981, POGO has exposed numerous problems that are the result
of so-called procurement or acquisition "reforms," including cozy
negotiations, inadequate competition, lack of accountability, little
transparency, and risky contracting vehicles that are prone to waste,
fraud, and abuse. While there have been some fixes to the federal
government's contracting systems, there are many more that must be
implemented.
- Increase the scope of civil, criminal, and administrative cases
included in the federal contractor responsibility and performance
database. Cases should include civil, criminal, and administrative
proceedings resulting in the payment of a monetary fine, penalty,
reimbursement, restitution, damages, or settlement of $5,000 or more to
a government-even when there is no admission of guilt or liability, and
even when it isn't related to a contract or grant. - Require contractors to provide cost or pricing data to the
government for all contracts, except those where the actual goods or
services being provided are sold in substantial quantities in the
commercial marketplace. - Require that all administrative agreements are shared among agencies and are made publicly available.
- Reverse the philosophy of quantity over quality in getting
contracts out the door. Acquisition is now about speed, and competition
is considered a burden, which is a recipe for waste, fraud, and abuse. - Debundle contract requirements to invite more contractors to the
table. Contracts that lump together multiple goods and services exclude
smaller businesses that could successfully provide one good or service,
but are incapable of managing massive multi-part contracts. Breaking
apart multi-supply or multi-service contracts would also assist the
government in reducing the multiple layers of subcontracting now
prevalent in federal contracting that can drive up costs while adding
little value. - Ensure that waivers of competition requirements are granted
infrequently-namely, the requirements for task and delivery orders
issued under multiple-award contracts or the federal supply schedule
program. - Increase emphasis on sealed bidding to achieve the lowest prices.
- Use reverse auctions more frequently when purchasing goods. Counter
to an auction where the price increases with each bid, the government
should conduct auctions where the contractors bid decreases with each
offer. In a DOE reverse auction for pagers, two companies submitted
initial bids for $43 and $51 per pager. At the close of bidding, the
government awarded the contract at the low price of $38 per pager. - Appropriate money to agencies to end their reliance on the
industrial funding fees collected from other agencies for orders placed
on interagency contracts. Currently, agencies procuring goods and
services for another agency receive a percentage of the purchase price,
and therefore might not be seeking best prices given that lower prices
result in lower fees received by the procuring agency. This fee system
creates a perverse incentive to keep costs or prices high. - The Truth in Negotiations Act (TINA) should be substantially
revised to restore the common-sense requirements that were in place
prior to the "acquisition reform" era. Specifically, all contract
awards over $500,000, except those where the goods or services are sold
in substantial quantities to the general public in the commercial
marketplace, should be subject to TINA. This small step would result in
enormous improvements in contract pricing, negotiation, and
accountability, and save taxpayers billions of dollars per year. - All contracting opportunities in excess of $100,000-including task
or delivery orders, and regardless of whether the action is subject to
full and open competition, awarded against a GSA Federal Supply
Schedule or an agency Government Wide Acquisition Contract, or any
other type of contracting vehicle-should be required to be publicly
announced for a reasonable period prior to award, unless public
exigency or national security considerations dictate otherwise. - All contracting actions, including task and delivery orders, should
be subject to the contract bid protest process at the Government
Accountability Office (GAO). While many will decry this recommendation
as adding "red tape" to the process, it is the only meaningful way to
ensure that contractors are treated on an even playing field, and that
agency contract award decisions can be justified in a way that will
instill public confidence.
None of these issues are partisan. In fact, the solution to many of
these problems involve strengthening the watchdogs in the government, a
goal that should be shared by both sides of the aisle.
These issues also provide an opportunity for
Members of Congress and the President to work together to sign into law
good government bills that prevent waste, fraud, and abuse. Passing
those laws and actually conducting real oversight would be a
substantive response to taxpayers' concerns that the government does
not spend their money sensibly. Swift implementation of comprehensive
government oversight will reap benefits for taxpayers long past the
election cycle.
