Automatic suspension in contracting bill draws ire of industry

Friday - 3/2/2012, 8:51pm EST

Scott Amey, general counsel, Project on Government Oversight

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Stan Soloway, president and CEO, Professional Services Counsel

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New legislation introduced Thursday aims to reform overseas contracting during wartime — an area an independent commission which studied the matter for four years found led to as much as $60 billion lost to waste.

Sens. Claire McCaskill (D-Mo.) and Jim Webb (D-Va.), who drafted the legislation establishing the bipartisan Commission on Wartime Contracting, have now introduced the new bill aimed at putting many of the panel's recommendations into practice.

But disagreement persists over whether the bill's provisions will enhance oversight of overseas contracting during conflicts or create another bureaucratic layer that penalizes contractors.

Scott Amey, the general counsel at the Project on Government Oversight, said the legislation represents a "thorough" effort to put the commission's recommendations into a legislative framework.

"This bill really tries to tackle accountability in contingency operations as well as transparency," Amey told In Depth with Francis Rose." I think what this really screams to me is the fact that Congress doesn't know a lot how contingency operations are working, how the money is being spent and that they're really trying to make sure that they're ... minding the store to make sure that all that money is spent wisely."

However, controversy surrounds the process for suspending contractors accused of misconduct.

The bill changes the acquisition regulations under which companies can be suspended by the federal government. Companies accused of a crime or fraud, as well as those who owe the government money from a contract, could be automatically suspended without a formal determination of guilt.

Stan Soloway, the president and CEO of the Professional Services Council, said many of the bill's provisions make sense. But the changes to suspensions and debarments, in particular, are giving industry "heartburn," he added.

The provision not only runs counter to the traditional suspension and debarment process but also the entire concept of due process, he said.

"When a company is suspended, that is a very, very big deal," he told In Depth. "And for some companies, it's the death knell. And to just automatically suspend a company on the basis of allegations, without any information or assessment by investigators into whether the company itself has an unethical culture or this was one rogue actor — that's a fundamental violation of due process and fairness as well."

Amey said stricter rules would help in protecting the taxpayer and troops.

"Nobody can be supportive of wartime profiteering or criminal or civil activities that places either troops at risk or is wasting taxpayer dollars," he said. "And I think this was an attempt to tighten up the rules and regulations that apply to make sure that we can protect the American taxpayers and soldiers from contractors that are considered risky."

But he acknowledged the traditional emphasis on banning only future work would be complicated in a wartime situation.

"Suspension only really protects the taxpayers from those contractors receiving future contracts," Amey said. "The question will be, how will this play out in the field when [companies are] already working on an existing contract and then the government may have issues with how they would find a replacement ... or handle that workload."

POGO's response to the legislation

PSC's response to the legislation

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