Contactors Behaving Badly Three Times Over

Last Updated Jul 8, 2009 5:54 AM EDT

The U.S Government and Department of Defense have lots of rules and regulations governing contract awards and management. Some say too much and it leads to the stifling of initiative, slower contracting and poor use of funds. Three recent stories indicate why sometimes this way of doing things is required. The government tries to award contracts fairly and in a way that saves them money. They want the work performed correctly and they are trying to avoid political interference in the process. These are all worthy goals and unfortunately they may require lengthy bid processes and reviews, slow execution and seemingly micro-management by the government.

First is a report that the Justice Department has joined a whistle-blower suit against SAIC. In this case SAIC is accused of working with Federal contracting officers to gain an advantage in the award of a contract to manage a super-computer center in Mississippi. SAIC is accused of being provided information not available to other bidders and also that the request for proposal was written to maximize SAIC chances of winning. The company denies the charges. If this is true then the award was unfair to other potential bidders and may be misuse and waste of government funds. To make matters worse one of the government officials involved supposedly created a company run by his wife that ended up as a sub-contractor to SAIC.

In the second story the DoD Inspector General is investigating a contract to build a new headquarters building in Kabul, Afghanistan by a Turkish company. The Army accepted the building even though it is alleged that the work was shoddy and there were safety issues. In fact a U.S. company was paid a few million dollars to fix the problems. This is a case where the contractor is accused of poor work and the Army of not monitoring it properly. The IG is trying to determine if the Army should have taken action to penalize the contractor, Zafer Construction.

In a story at the local level the Cook County, Illinois Capital Planning and Development Department is accused of awarding contracts based on the political influence of the company rather then accepting the lowest bid. It is not always necessary to accept the lowest bid if you are doing a best value contract but many construction contracts are lowest bid. This is because the work and costs are fairly well understood by the government and the companies bidding. In this case the Daily Herald and Better Government Association (BGA) study cited found "hat political donors were linked to every one of the 11 projects, the only group of county contracts the law does not require to go to the lowest bidder." This is tried to be prevented as it ends up costing the government money and may not result in the best work.

In the past these kind of actions led to the many layers of regulations and reviews levied on contracting officers and government officials as well as the contractors themselves. Government owes it to the tax payer to buy the best value product within the rules. Sometimes this is the lowest bid, and sometimes it is the most bang for the buck. Unfortunately tales like this can seem to be common and it undermines confidence in government and contractors in general.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.