Congress Continues Insufficient Oversight of Federal Contracts
by Matthew Madia, 11/7/2006
Even as reports of contracting fraud and contractor malfeasance continue to stack up, Congress has taken steps to reduce the federal government's capacity to investigate and oversee how government contracts are awarded and administered. Last month, the House Appropriations Committee announced it had eliminated the jobs of 60 investigators charged with closely monitoring defense contracting and intelligence spending. Congress also threw a last-minute provision into the 2007 Defense authorization bill that effectively abolishes the office of the Special Inspector General for Iraqi Reconstruction, which had focused on contractor abuses in Iraq. Congress could in effect be crippling its own capacity to hold contractors accountable. Typically, only government officials have the authority and resources to perform comprehensive reviews of government contracts. Were it not for these offices, much of what Congress and the public now know about contract abuse may never have emerged. For instance, the Special Inspector General for Iraqi Reconstruction was responsible for providing the factual basis of many recent media accounts on contracting waste and abuse. One attention-getting report found that Halliburton-subsidiary Kellogg, Brown and Root (KBR) claimed exorbitant overhead and administrative fees in its contracts. In some cases, KBR took in fees that consumed more than half of a contract's budget, and KBR overhead charges were generally a full 10 percent higher than those reportedly charged by other companies. The Inspector General also found that the Parsons Corporation had failed to complete numerous projects it had been awarded contracts for. In one vivid example, Parsons had constructed a building to house an Iraqi police academy that was built so badly - with waste from defective plumbing flowing through floors - that it has never been occupied. Thanks to the oversight role of Inspector's General investigations, some federal program administrators have held faulted contractors accountable. In fact, after reports emerged of Parsons Corp.'s failures, the Army Corp of Engineers canceled more than $300 million worth of contracts with the company. Sadly, these instances of successful oversight are the exception, rather than the rule. Administrative and congressional inaction has been the order of the day recently. In a June 2006 report, the Special Investigations Division of the House Committee on Government Reform found few contractors have been punished for known abuse, and many contractors who have been cited for abuses or failures have obtained additional contracts nonetheless. Congressional neglect has extended to its investigative responsibilities. The House Appropriations Committee investigative team found it difficult to get the committee interested in oversight even before the staff firings. "There wasn't anybody down there who gave a hoot about intelligence spending," Scott Wyman, a former investigator, told CQ Today. The recent staff cut-backs also attest to the disinterest among House Appropriations Committee leaders in informing the public of the true extent of our government's failures during the Hurricane Katrina recovery effort. The team conducted extensive investigations of government contracts related in the recovery. Yet Chairman Jerry Lewis (R-CA), who ordered the firings and is the target of an FBI corruption investigation, has refused to release any of these reports. The investigative team was also on track to complete a final report on the Katrina contracts, which Lewis had promised would be released to the public, but the staff shortage has made it impossible to finish this report. Fortunately, neither of these harmful decisions may be difficult to undo. Senate Republicans have already begun discussing ways to restore the authorization of the Special Inspector General's office, and a new House Appropriations Committee chair could decide to hire back the fired members of the investigative team, or recruit new ones. Congressional leaders who made these decisions, however, are unlikely to reverse them. As it becomes increasingly clear that more oversight is needed, Congress has acted to make it harder for itself and the executive branch to keep up even the current, grossly inadequate, level of oversight.