Making Government Transparent and Accountable
The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
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Memo to Congress: Open a Wider Window on Contractors
With the Federal Reserve, the Federal Deposit Insurance Corp., the Federal Housing Administration and the Treasury combining to promise trillions (as much as $7.7 trillion to be precise, but who, other than Bloomberg News, is counting?) with little or no transparency or disclosure for the bulk of the money, it’s easy to lose sight of the relative nickels and dimes doled out in contracts awarded by federal agencies to private firms — all $430 billion of it.
The extent to which contractors interact with government is breathtaking — to give on example, the army field manual setting forth the rules contractors must abide by on the battlefield was written by Military Professional Resources Inc., a government contractor. And abuses in the system have been well-documented: Rep. Randy “Duke” Cunningham went to jail for steering federal contracts in exchange for bribes; Darleen Druyun, an Air Force procurement officer, earned her prison stripes by swinging a sweetheart tanker deal for Boeing before leaving the Pentagon for a sweetheart job with…Boeing.
Sites like FedSpending.org and the Federal Contractor Misconduct Database bring a little transparency and accountability to the process, but there’s far more information that Congress should require that the federal government provide.
Once upon a time, contractors had to publicly disclose when they went outside the normal procurement process and hired lobbyists to attempt to win contracts. Bringing back those disclosures (which required lobbyists to list those they were meeting with on behalf of clients) and integrating those disclosures with the data available on USASpending.gov (FedSpending’s less robust government cousin) would be one place to start. Clearly identifying which contracts satisfy presidential and congressional earmarks would be useful as well. Linking up contract awards in USASpending with archived solicitation notices in FedBizOpps, the government’s official contracting opportunities database, would also provide the public with a fuller picture of what the government is buying. (In USASpending, a Blackwater State Department contract is described as being for “protective services – Iraq.” Fedbizopps provides somewhat more detail on what a security contract might entail.)
Government can’t do its work without contractors — everything from the security of State Department officials to answering requests for documents under the Freedom of Information Act have been outsourced. But government can require more transparency from contractors and the federal agencies they work for — keeping them open keeps the system honest.
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Federal Contract Spending
Scott Amey at the Project for Government Oversight’s POGO blog writes about being positively surprised by one thing he found at USAspending.gov, the government site modeled after OMB Watch’s FedSpending.org. 2007 data has been replaced by updated FY 2008 and 2009 totals. (This is shocking on two fronts. The government is usually years behind in reporting contract spending dollars.)
But Scott’s more shocked to find that the government spent over $510 billion on goods and services in FY 2008. “And if history repeats, this total will increase by an additional $10-$20 billion as agencies report additional information,” he writes. That amount would rank as the 25th largest GDP in the world, he figures.
In the shadow of the huge multi-trillion dollar financial bailout, all these huge numbers are mind numbing. Federal contract spending is out of control, and deserving of much more oversight and transparency, don’t you think?
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Contracting Transparency Please
What would you say if the Defense Department outsourced the arming of our allies in Afghanistan to a company run by a serial stalker and a licensed masseur? The New York Times reports that the main supplier of munitions to Afghanistan’s fledging military and police forces, AEY, Inc., has been sending 40 year old munitions acquired from former Soviet bloc countries that do not work. AEY, Inc., is headed by Efraim Diveroli, a young man who used his position as a defense contractor to try and weasel his way out of court appearances regarding stalking charges filed against him by a girlfriend who alleged abuse and was nearly convicted of felony battery. The entire story really must be read in total. The AEY story is reminicent of the great movie Lord of War, except the protagonist here, Diveroli, is a bumbling, corrupt fool and not a successful enabler of mass murder like the Nicholas Cage character.
With the award last January of a federal contract worth as much as nearly $300 million, the company, AEY Inc., which operates out of an unmarked office in Miami Beach, became the main supplier of munitions to Afghanistan’s army and police forces.
Since then, the company has provided ammunition that is more than 40 years old and in decomposing packaging, according to an examination of the munitions by The New York Times and interviews with American and Afghan officials. Much of the ammunition comes from the aging stockpiles of the old Communist bloc, including stockpiles that the State Department and NATO have determined to be unreliable and obsolete, and have spent millions of dollars to have destroyed.
In purchasing munitions, the contractor has also worked with middlemen and a shell company on a federal list of entities suspected of illegal arms trafficking.
Moreover, tens of millions of the rifle and machine-gun cartridges were manufactured in China, making their procurement a possible violation of American law. The company’s president, Efraim E. Diveroli, was also secretly recorded in a conversation that suggested corruption in his company’s purchase of more than 100 million aging rounds in Albania, according to audio files of the conversation.
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Two federal officials involved in contracting in Baghdad said AEY quickly developed a bad reputation. “They weren’t reliable, or if they did come through, they did after many excuses,” said one of them, who asked that his name be withheld because he was not authorized to speak with reporters.
By this time, pressures were emerging in Efraim Diveroli’s life. In November 2005, a young woman sought an order of protection from him in the domestic violence division of Dade County Circuit Court.
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Mr. Diveroli sought court delays on national security grounds. “I am the President and only official employee of my business,” he wrote to the judge on Dec. 8, 2005. “My business is currently of great importance to the country as I am licensed Defense Contractor to the United States Government in the fight against terrorism in Iraq and I am doing my very best to provide our troops with all their equipment needs on pending critical contracts.”
Diveroli and AEY’s track record, and lack of experience, act as yet another example that failure to provide transparency and an open bidding process when award national security/defense contacts is a recipe for failure. There is an over reliance on hiding information from the public solely based on national security or defense concerns. In many, or perhaps most, cases the public revelation of information would likely protect national security by preventing goons like Diveroli from being involved in the nation’s defense policy, particularly as it relates to a difficult situation like Afghanistan. At the Change Congress launch, Matt Stoller brought this issue up and has since blogged about the over reliance on government secrecy based on national security at Open Left
There have been a number of bills submitted over the past year that seek to reform the contracting world. Congress needs to get together and fix this mess or else the next President will have to.
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House Considers Transparency Measures
We’ve been following the progress of a couple of bills making their way through Congress. H.R. 1309 puts a little more teeth in our Freedom of Information Act–the main lever that the press and the public has for prying documents out of the executive branch (and see here for useful FOIA tips maintained by Investigative Reporters & Editors), while S. 223 would, for the first time, require campaign committees of Senate candidates to file their contribution and expenditure information electronically with the Federal Election Commission rather than sending in stacks of paper (both House and Presidential candidates file electronically).
There are other measures that are worth noting as well (with votes on all scheduled in the House for today and tomorrow). For me, the most interesting is H.R. 1254, which would force presidential library foundations to make their donor lists public. It is unseemly enough to have a foundation seeking millions of dollars from donors–corporate and individual, U.S. and foreign–to build what is essentially a monument to a former president; that they can do so anonymously, while that president is still in office, is a recipe for corruption (The name Marc Rich immediatley springs to mind for some reason…)
H.R. 1255 establishes procedures for releasing presidential records, and overturning the 2001 executive order from President George W. Bush that sharply restricted (and in many cases out-and-out eliminated) public access to these government documents. I’d actually like to see a government records act that goes a little further–former government officials generally have not only much better but also lengthy periods of exclusive access to their records. In 1992, Steve Weinberg wrote a book (along with my old shop, the Center for Public Integrity, called For Their Eyes Only: How Presidential Appointees Treat Public Documents As Personal Property that documented the ways in which presidential appointees “take classified documents with them after leaving public service, use the materials to write lucrative memoirs, and then seal off these documents for decades from historians, journalists, and other researchers.” It’s not just presidential papers to which the public needs better access.
H.R. 985 expands whistleblower protections–protecting agency employees who report waste, fraud, abuse, illegalities and other malfeasance to members of Congress or Inspectors General from administration retribution.
Finally, H.R. 1362 addresses shortcomings in the government’s relationships with private contractors. Rep. Henry Waxman, who chairs the House Oversight Committee, has a summary of the bill’s provisions here. Just a quick observation on this–I’d like to have seen a provision that would try to determine why, for so many contracts for which there is open bidding, only one bidder shows up (which seems to me to be almost as bad as no-bid contracts, and as much of a problem). In 2005, the last year for which we have complete data, ten percent of contracts–worth nearly $40 billion–were awarded under that scenario, according to our friends at FedSpending.org.
All these bills would add to our ability to know what government is up to and keep it accountable–not a bad couple of day’s work for the House if they pass them…
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First FOIA Response on SF-LLLs
A brief, puzzling update (below the fold) on my attempts to get my hands on actual forms SF-LLL, which government contractors or grantees must file when they make a payment or agree to pay “any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a covered Federal action,” with the latter phrase referring to any contract, grant, cooperative agreement, loan, loan guarantee or loan insurance worth more than $100,000. A reminder: The hope here is that if we can get enough forms SF-LLL, we can start to distinguish between those contracts awarded through the normal procurement process, and those awarded after lobbyists went outside the normal procurement process to influence members of Congress or administration officials. If we can get a complete set of all forms SF-LLL filed with the government, we might be able to build a database from that information, linking it with or incorporating it into sites like FedSpending.org, which tracks government contracts and spending, or OpenSecrets.org, which tracks political influence.
Now, for the update: I got an answer to a Freedom of Information Act request I filed on Feb. 5, 2007, with Hanscom Air Force Base requesting any forms SF-LLL filed by or on behalf of a company, ProLogic, in connection with this award:
ProLogic Inc., Fairmont, W.Va., was awarded on 19 December 2005, a $7,090,838 cost plus fixed fee contract to research how the best to gather required medical data from medical encounters, analyze it, and make to available to users in support of medical planning and operations using a Net-Centric approach identified as MED-STARS. At this time $2,208,000 has been obligated. This work will be complete by October 2008. Solicitations began January 2005 and negotiations were completed in August 2005. The Headquarters Electronic Systems Center, Hanscom Air Force Base, Mass., is the contracting activity. (FA8726-06-C-0005).
The response reads as follows:
1. This is in reference to your FOIA request, dated 5 February, for any and all forms SF-LLL.
2. We do not maintain these forms; therefore, we have no records to give you.
3. If you decide to appeal this response, please write to the Secretary of the Air Force within 60 days from the date of this response, and include your reasons for appeal. Attach a copy of this response and address your letter to:
Secretary of the Air Force
THRU: 66 MSG/SCSF
63 Grenier Street
Hanscom AFB, MA 01731-2303Line #2 strikes me as being oddly worded. I can understand if they don’t have any forms because ProLogic didn’t lobby on that particular contract, and didn’t file the form. Then the response should be that, after searching their files, there are no “responsive documents,” or some such. But what does it mean that they don’t maintain the forms? Does that mean they get them but send them somewhere else? Throw them out? That if they’re offered them, they refuse to take them? Rather than immediately file an appeal, I emailed back asking for clarification of item 2 of the response.
For the record, here is the portion of the Code of Regulations (32 CFR 28 for those keeping score at home) that requires “persons” (defined below as “an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit”) “requesting or receiving” a contract, grant, loan and so on, to file form SF-LLL (shown in appendix B).
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FedSpending.org Now Features 2006 Data
FedSpending.org, the go-to site for all government spending information, has now added some 2006 data–the full set isn’t available from the Feds just yet–plus some new and improved features for keeping track of how Washington manages our money. Congratulations to all at OMB Watch on the upgrades and updates. I’m appending the press release below, but what I think might be the coolest new feature is the summary data, which provides a really nice snapshot–here’s Lockheed Martin, and here’s Halliburton. Compare the trend boxes.
Though we’re two months into 2007, the federal government has yet to release all of the 2006 data–I think it’s generally the Department of Defense that lags behind (though in fairness, they award more contracts than anyone else).
It’s also worth noting that the Office of Management and Budget, who are building official database of government spending required by the Coburn Obama bill, have launched FedSpending.gov, which right now is soliciting suggestions, comments and ideas for the federal site. Nice to see that they link to OMB Watch’s excellent effort. I’m going to make a suggestion of my own, and will post it here when I’m finished.
OMB Watch Launches Upgraded FedSpending.org Website
WASHINGTON, Feb. 22, 2007—OMB Watch today launched the first in a series of upgrades to its popular FedSpending.org website (http://www.fedspending.org). The site updates make FedSpending.org more comprehensive, more searchable, and more customizable. Journalists, researchers, and the public, among others, will benefit from the upgrades.
The upgraded FedSpending.org site includes the following improvements:
• Updated Data – FY 2005 now contains all four quarters of federal assistance data; the most recent publicly available data for FY 2006 has been added for both contracts and assistance (but the data for both remains incomplete at this time); many problems in older data have been corrected.
• Summary View – This level of detail has been designed to provide a better overview of contractors, recipients, congressional districts, states, and agencies, as well as other data categories, such as recipient type, assistance type, grant programs, products and services contracted for, and extent of competition. The summary view also includes a new Trend bar chart to quickly compare changes over time. The view is brand new for contracts and significantly upgraded for assistance.
• XML Output – The site now provides an XML format for data which will allow advanced users and programmers to design their own interfaces to pull and display FedSpending.org data.
• More Searchable – Improvements in page titles and implementation of sitemaps protocol should make it easier to find FedSpending.org data through online search engines (Google, Yahoo, MSN, etc.).
• New Home Tab – The side bar navigation now includes a separate “folder tab” for the home page of the website, making it easier for visitors to navigate among the different sections of the website.OMB Watch welcomes feedback on the upgrades and ideas for future improvements at http://www.fedspending.org/contact.php. The organization intends to launch two additional upgrades to the FedSpending.org website in 2007. The first is scheduled for June/July and the second is scheduled for October/November. Among the improvements that OMB Watch hopes to include are a mapping function, inflation adjustments, and the ability to combine federal spending data with other census data.
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Vanity Fair Scrutinizes a Top Government Contractor
As they so often are able to do, investigative journalists Donald L. Barlett and James B. Steele, writing for Vanity Fair, offer both a sense of the scale and the substance of the issues raised by the federal government’s increasing reliance on contractors.
It is a simple fact of life these days that, owing to a deliberate decision to downsize government, Washington can operate only by paying private companies to perform a wide range of functions. To get some idea of the scale: contractors absorb the taxes paid by everyone in America with incomes under $100,000. In other words, more than 90 percent of all taxpayers might as well remit everything they owe directly to SAIC or some other contractor rather than to the IRS. In Washington these companies go by the generic name “body shops”—they supply flesh-and-blood human beings to do the specialized work that government agencies no longer can. Often they do this work outside the public eye, and with little official oversight—even if it involves the most sensitive matters of national security. The Founding Fathers may have argued eloquently for a government of laws, not of men, but what we’ve got instead is a government of body shops.
The article goes on to profile Science Applied International Corporation, or SAIC, among the top ten government contractors, and how they do business with the federal government–relying on agency records, court filings, and whistleblowers. It’s an amazingly revealing piece of work.
So where’s Congress in all this? I couldn’t help noticing that it appears that the company has lobbied Congress over various appropriations bills–it seems like it would be worth it to find out if SAIC is also lobbying Congress over specific contracting issues. Which means that I’ll be sending out a few more FOIA requests as we continue to pursue Form SF-LLL, which contractors must file “for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a covered Federal action” — with “covered Federal action” meaning the awarding of a contract or a grant.
UPDATE: Yikes, forgot to add the full disclosure–I had the pleasure of working for Barlett and Steele as a researcher on a 1996 Philadelphia Inquirer series they did that was also published as a book, America: Who Stole the Dream?, which looked at American Trade, Tax and Immigration policy and its effect on the middle class. It’s amazing how many of the issues they raise in that book are as relevant (and unaddressed) today as they were then. But then, I’m biased…
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Trying to Answer Questions about Contracts and Lobbyists
Last week, GoodbyeJim.com’s Jonathan Marks wrote a post about a company called ProLogic. After noting that that company has made campaign contributions to Rep. James Moran, and has hired a sophisticated lobbying firm, PMA Group, whose employees have been generous contributors to Moran’s campaigns over the years, Marks raises what I think is a fairly important question: How does ProLogic win business? How does it fair against competing firms that don’t have the benefit of any representation from a savvy insider firm like PMA Group (which describes what it does here)? And what does this say about the way procurement decisions are made in the government? Are we always buying the best mousetrap? Are we unable to buy the best mousetrap without the mediation of lobbyists? Conversely, are we making do with somewhat overpriced, somewhat mediocre mousetraps because the company that manufactures them hired the lobbyist with the right connections?
To get back to Marks’ question, I think the first thing you have to do is separate out the contracts on which ProLogic (or any company, for that matter) lobbied from those it got without going beyond the normal procurement procedure–sending a proposal to a government agency, perhaps making a presentation to the acquisitions officials, and then keeping your fingers crossed that yours is the most attractive mousetrap in terms of price and quality.
Sadly, you can’t answer such questions using traditional lobbyist disclosure forms. The one linked, filed by PMA Group on Feburary 9, 2006, and covering the final six months of 2005, lists the following as specific lobbying issues:
H.R. 2528, Military Quality of Life, Veterans Affairs Appropriations, 2006, NASA H.R. 2683, Department of Defense Appropriations Act, 2006, R&D
Would anyone care to wager on whether the following contract, described here, falls under that description:
ProLogic Inc., Fairmont, W.Va., was awarded on 19 December 2005, a $7,090,838 cost plus fixed fee contract to research how the best to gather required medical data from medical encounters, analyze it, and make to available to users in support of medical planning and operations using a Net-Centric approach identified as MED-STARS. At this time $2,208,000 has been obligated. This work will be complete by October 2008. Solicitations began January 2005 and negotiations were completed in August 2005. The Headquarters Electronic Systems Center, Hanscom Air Force Base, Mass., is the contracting activity. (FA8726-06-C-0005).
Or whether any of the other contracts the company won–from the Departments of Energy, Defense and Veterans Affairs as well as NASA and the General Services Administration, were the subject of specific lobbying actions by PMA Group?
I’ve started the process of requesting under the Freedom of Information Act any forms SF-LLL, which a contractor must file with a contracting agency if it’s paid a lobbyist to work on its behalf in connection with the contract award, to see if I can answer that question.
This part is pretty tedious–a lot of cutting and pasting word documents, plus entering what I’m asking for into a simple excel spreadsheet to keep track of what I’m asking for and from whom. Still, even though it’s not the most exciting way to spend a day, I find it’s best to get FOIAs out the door as quickly as possible, in no small measure because the government can be quite slow when it comes to releasing documents, even ones that say, “This information will be available for public inspection.”
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Small Business Hires Big Lobbyists
At GoodbyeJim.com, a site that closely monitors the member of Congress from my district–Rep. James Moran of Virginia’s 8th district–Jonathan Marks has an interesting post about a small government contractor called MobilVox. In the 2004 election cycle, the firm’s employees made modest campaign contributions to a trio of lawmakers–Rep. Randy “Duke” Cunningham, Rep. John Murtha, and Moran. In fiscal year 2005, according to FedSpending.org, the Navy awarded MobilVox a contract worth $507,092. Marks wonders whether it’s worth looking at MobilVox more closely.
Now, I’m not really interested in MobilVox per se. Murtha described the company in a press release as a “fast-growing small business contractor” that “applies cutting-edge mobile technologies to offer high-end engineering, technical business consulting and integration services for enterprises voice and wireless data solutions for the government and commercial sectors;” let’s take it for granted that they’ve got all the potential and all the challenges that any small business in the high tech sector faces.
What interests me is not so much the private sector, but its intersection with the public sector. I’m referring to the often tediously arcane subject of federal procurement, which might better be described as how the government (defined here as both Congress and the executive branch) go shopping. Or, if you’re a small firm like MobilVox and you’re trying to sell something for the first time to the federal government, how do you go about it?
I couldn’t help noticing, for example, from 2003 to 2005, MobilVox was represented in Washington by KSA Consulting; on its most recently filed lobbying disclosure form, the firm includes Carmen Scialabba, a former Murtha staffer who figured in this Washington Post story, and Robert Murtha, the brother of Rep. Murtha, on the list of lobbyists who contacted the House to discuss “defense appropriations” on behalf of MobilVox.
In the first half of 2006, another firm–the PMA Group–reported receiving $60,000 from MobilVox to lobby the House, Senate and the Defense Department on Defense appropriations. PMA listed Melissa Koloszar, former chief of staff to Rep. Jim Moran, as one of its lobbyists working on behalf of MobilVox.
In the first half of 2006, yet another firm–this time Pittsburgh-based GSP Consulting–reported receiving $20,000 from MobilVox to lobby the House and Senate on FY07 Budget appropriations. GSP listed Scott Harshman, whose company bio says he worked for Rep. Murtha from 1994 to 2003, as one of its lobbyists working on behalf of MobilVox.
Until the relationship was terminated on May 15, 2005, Charters and Company LLC lobbied the House and Senate on MobilVox’s behalf on Defense appropriations. Timothy T. Charters, who served as an aide to Rep. Randy “Duke” Cunningham, was the lobbyist who approached the Hill; for the last five-and-a-half months of work, the firm disclosed receiving $20,000 from MobilVox.
Now, MobilVox is hardly the only company to hire a bevy of well-connected Washington lobbyists. Compared to, say, a big contractor like Lockheed Martin, their lobbying expenses are negligible. But what does it say about the efficacy of our procurement system that a fast-growing small business contractor that employs cutting edge technologies ends up spending, at a minimum, some $160,000 since 2003 on Washington lobbyists while seeking contracts from the federal government? Couldn’t that money be better used on R&D, or a better dental plan or higher wages for employees?
And is there any indication that Congress regards this state of affairs as a problem?
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Family Business — 3rd Update
The basic research is done, and before I begin making the earnest effort to digest the raw results, let me first thank all who participated–especially Beezling, who topped his prolific performance on round one with an incredible turn on round two–he did 319 this time around, doing by far the bulk of the entries. Get that man a fedora and a press pass!
More information soon…
