Lawmakers seek curbs on DoD, intel contractors

“Contracting oversight and accountability issues remain a concern,” said Rep. Ike Skelton, D-Mo., chairman of the House Armed Service Committee. His committee approved a Defense authorization bill that calls for a new definition of what’s inherently governmental work, would hold contractors to the same ethical standards as federal employees, and enact reforms recommended by the Gansler

Commission, which called for an overhaul of the Army’s contracting in war zones.
Government outsourcing also was a key focus of the authorization bills.

“In response to the Defense Department’s increasing reliance on contractor services, this mark requires a comprehensive analysis of what constitutes an ‘inherently governmental function,’” said Rep. Solomon Ortiz, D-Texas, chairman of the House Armed Services Readiness Subcommittee.

Senators who approved the intelligence authorization bill voiced strong concerns that intelligence agencies are outsourcing tasks that are inherently governmental.
“The CIA has used contractors for interrogations, as [CIA Director] General [Michael] Hayden admitted in an open, public hearing,” Sen. Dianne Feinstein, D-Callif., said in a Feb. 13 statement. “So the CIA has outsourced what is an inherently governmental function of questionable legality and morality.”

One measure in the Defense authorization bill — which has prompted a sharp outcry from the White House — would ban the Defense Department from conducting public-private job competitions, also known as A-76 studies, for three years.
The bill, which the committee passed 61-0 on May 14, would halt the competitions “to ensure that the services’ operations are fully met” while troops are fighting abroad and the department is transforming at home,” the committee said in a news release.

“The administration would strongly oppose language that would prohibit the department from considering public-private competition and interfere with its ability to manage resources in the most cost-effective manner possible,” an OMB spokeswoman said in response. “Imposing a moratorium because of the potential impact on other department initiatives is unnecessary and inappropriate as the department already has authority, and has used authority, under circular A-76 to cancel competitions when in the best interest of the department to do so.”
The American Federation of Government Employees, which has pushed for competitive sourcing restrictions in recent years, applauded the prohibition introduced by Rep. Nancy Boyda, D-Kan. “We are strong supporters of the Boyda amendment,” said John Threlkeld, legislative affairs representative for AFGE.

Stan Soloway, president of the Professional Services Council, said the ban on A-76 undermines the Pentagon’s ability to find efficiencies and cost savings.

According to OMB, Defense has saved $7 billion through competitions held between 2001 and 2007.

The A-76 ban is the most aggressive move lawmakers have attempted so far to limit the controversial practice of job competitions. Last year, Congress passed many measures curbing the practice, including: barring public-private competitions at some agencies; granting protest rights to federal employees who lose competitions; and excluding federal health benefits costs from agencies’ calculation to determine the winner of a jobs competition.

Clampdown on intel contracting
The Senate Select Intelligence Committee, meanwhile, approved an authorization bill that included measures it said are “aimed at reducing the overall use of contractors by the intelligence community.”

The senators want the Director of National Intelligence (DNI) to submit a report to Congress on all intelligence activities being performed by contractors that should be carried out by government employees. The report should include a head count of contractor employees performing each activity and plans to transfer the work to government employees, the committee said.

“The committee believes these provisions are necessary for financial and accountability purposes,” the May 8 committee report said.

The reporting provision was sponsored by Feinstein. She sponsored a second provision with Sen. Russ Feingold, D-Wis., to bar the CIA from using contractors for interrogation of detainees following reports that CIA contractors used waterboarding to obtain information.
Contractors’ unorthodox methods have added “a layer of concern because those contractors are not answerable to Congress,” said Steven Aftergood, director of the Project on Government Secrecy for the Federation of American Scientists.

More broadly, however, the contracting concern is over the growing role of contractors in intelligence work, Aftergood said.

“The role of contractors in intelligence has skyrocketed and more than doubled in the last decade in terms of both expenditures and the number of contracts,” he said.
As a result there has been “a drumbeat of concerns” for the last few years to bring more congressional oversight to how intelligence agencies use contractors, Aftergood said.

Other provisions in the bill would bar contractors from providing advisory or assistance services on any major system acquisition if that company is involved in providing the products or services for the acquisition. If adopted, the provision would take effect in 2010.
The purpose of the proposal is to avoid conflicts of interest that arise when a parent company, subsidiary or affiliate company oversees the work of its business partners, the committee said. Furthermore, oversight of systems contracts is an inherently governmental function that should not be contracted out, the committee wrote.

While collecting information about contractor roles and responsibilities is a good step toward helping agencies understanding how they currently meet their missions, blanket bans on contractors are not sound management, said Alan Chvotkin, vice president of the Professional Services Council.

Agencies should not be prohibited from using contractors, especially in highly sophisticated areas where there isn’t a variety of companies available to do the work, he said. Furthermore, the government simply does not have the in-house skills to do much of the work Congress wants to limit to federal employees, he said.

Agencies need to collect data on their in-house skills, costs and capabilities to get a full picture of their needs, to ensure their able to meet their missions without contractors, he said.

Stand and be counted
House lawmakers also want Defense to report on the number and type of logistical support contractors needed to meet Defense needs. Under the proposal, Defense will have to show Congress how it’s implementing a plan by the Joint Chiefs of Staff that requires Defense to collect information on how contracts will be awarded and how contractors will be managed in future operations, according to the committee.

Previous years’ Defense legislation has also required a full inventory of contractor work with the aim of identifying inherently governmental work that can be brought back in house.

Where contractors are used to perform federal work, lawmakers want Defense to apply the same conflict-of-interest rules that govern federal employees. The Senate version of the Defense bill, on which the Senate Armed Services Committee issued a May 12 report, contains a similar provision to require contractor employees disclose financial conflict of interest, refuse gifts from companies affected by their work and avoid using nonpublic government information for personal gain.

In March, the Government Accountability Office reported that contractor employees are not required to disclose personal conflicts of interest, putting government decision-making at risk of being improperly influenced by an individual out for personal gain. Shortly after that report, the administration proposed personal conflict-of-interest rules for contractor workers that would hold them accountable to government conflict-of-interest rules.

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