Coburn-Obama Effort To Curb Wasteful Federal Spending

John Quayle blueoval57 at VERIZON.NET
Wed Aug 30 18:13:27 MDT 2006

>The Free Congress Commentary
>Coburn-Obama Effort To Curb Wasteful Federal Spending
>By Stephen M. Lilienthal
>August 17, 2006
>Senator Barack H. Obama (D-IL) appeared recently 
>before the Senate Federal Financial Management 
>(FFM) Subcommittee to ask a question that should 
>be heard more often from his colleagues: “How 
>can we expect the American people to have 
>confidence in us when all they hear about is 
>overcharging and overpayments, pork-barrel 
>projects like the Bridge to Nowhere, and money 
>being wasted on frivolous expenses? How can we 
>expect them to have confidence when the 
>Administration and Congress seem unwilling or 
>unable really to hold people accountable?” Obama 
>noted that even United States Senators 
>experience difficulty in obtaining quick, 
>accurate information about Federal spending. He 
>told the Subcommittee, chaired by Senator Thomas 
>Coburn, M.D. (R-OK), that maintaining control of 
>Federal spending is not a partisan issue:
>“Whether you believe the government ought to 
>spend more money or spend less, you should 
>certainly be able to agree that the government 
>ought to spend every penny efficiently and 
>transparently. Democrats and Republicans can all 
>agree that wasteful spending is unacceptable, 
>whether it’s by FEMA [Federal Emergency 
>Management Agency], HUD [Department of Housing 
>and Urban Development], DOD [Department of 
>Defense], or any other federal agency.”
>Obama has teamed with Coburn, Senator Thomas 
>Carper (D-DE), Ranking Member on the FFM 
>Subcommittee, and Senator John S. McCain, III 
>(R-AZ)  to introduce S. 2590, the Federal 
>Funding Accountability and Transparency Act, the 
>purpose of which is to provide citizens with a 
>website, managed by the Office of Management and 
>Budget, which would list all organizations 
>receiving Federal funds from 2007 onward, 
>providing breakdowns based on the agency 
>allocating the funds, the dollar amount given 
>and the purpose of the grant or contract.   The 
>website would need to be updated “not later than 
>30 days after the award of any assistance requiring a posting.”
>The Federal Funding Accountability and 
>Transparency Act was approved recently by a 
>unanimous vote of the Senate Homeland Security 
>and Government Affairs Committee. This bill is 
>receiving support from over 100 organizations, 
>including the American Society of Newspaper 
>Editors, Americans for Democratic Action, 
>Concerned Women for America, Eagle Forum, 
>Project on Government Oversight, National 
>Taxpayers Union and the United States Chamber of 
>Commerce. A similar bill passed the House of 
>Representatives and Coburn is hopeful that his 
>bill will be passed by the Senate this fall and signed by President Bush.
>It is rare in Washington to assemble such a 
>diverse coalition but a few examples demonstrate 
>that there is good reason to demand greater 
>transparency and accountability in contracting by the Federal government.
>After Hurricane Katrina, the Federal Emergency 
>Management Agency (FEMA), relying on emergency 
>authority, issued four no-bid contracts related 
>to temporary housing to Shaw Group, Inc., 
>Bechtel Corporation, CH2M Hill Construction Inc. 
>and Fluor Corporation.  R. David Paulison, 
>Acting Director of FEMA, was quoted in an 
>October 7, 2005 Cox News Service story by Julia 
>Malone entitled “FEMA To Put No-Bid Contracts Up 
>For Rebidding” as promising the Senate 
>Committee, “We are going to rebid all the no-bid 
>contracts.” Because one and one-half months 
>later the contracts had not been rebid, Coburn 
>and Obama were able to secure passage of an 
>amendment to the tax reconciliation bill 
>expressing in a Sense of the Senate resolution 
>that FEMA without delay should rebid the 
>contracts. Obama and Coburn then met with 
>Paulison who, according to Obama, told the 
>Senators the contracts would be rebid.
>The Associated Press reported nearly six months 
>later, in a March 24, 2006 story, “FEMA Breaks 
>Promise On Katrina Contracts,” posted on MSNBC, 
>that the contracts would not be rebid, 
>“including three that federal auditors say 
>wasted significant amounts of money.” FEMA 
>officials cited good performance and said the 
>contracts actually had been extended. The 
>Government Accountability Office (GAO) had 
>issued a report at the same time criticizing the 
>performance on a number of Katrina-related 
>contracts, including three of the four temporary 
>housing-related contracts cited above.
>Obama stated on May 2, 2006 on behalf of an 
>amendment that he and Coburn sponsored to stop 
>no-bid contracts for the Gulf Coast: “The abuse 
>doesn’t stop with these four contracts. We 
>learned just two weeks ago that the Army Corps 
>of Engineers missed an opportunity to negotiate 
>a lower price on a $40 million contract for 
>portable classrooms in Mississippi. Instead, a 
>no-bid and overpriced contract was awarded to an out-of-state firm.”
>Coburn and Obama have succeeded several times in 
>passing amendments urging a cessation to no-bid 
>contracting related to Katrina in excess of 
>$500,000. Their amendment to the Emergency 
>Supplemental Appropriations Bill was passed 
>unanimously by the Senate, only to be stricken 
>in conference. An amendment added to the 
>Department of Defense Authorization Bill is now 
>in conference. They also succeeded with a 
>similar amendment to the Department of Homeland Security Appropriations Bill.
>A report, “Dollars, Not Sense: Government 
>Contracting  Under The Bush 
>Administration,”  issued in June by the Special 
>Investigations Division of the  Minority Staff 
>of the House Committee on Government Reform, 
>“identifies 118 contracts collectively worth 
>$745.5 billion that have experienced significant 
>overcharges, wasteful spending, or mismanagement 
>over the last five years.” Each case cited was 
>the subject of reports from the GAO, the Defense 
>Contract Audit Agency (DCAA), agency inspectors 
>general and government officials which 
>identified mismanagement. The report cited the 
>specific concern that the awarding of 
>non-competitive contracts has increased sharply. 
>Non-competitive contracts represented $67.5 
>billion in 2000 but amounted to $145 billion in 
>2005. The report contends the lack of 
>competitive bidding increased the likelihood 
>that the contracts were overpriced.
>One example of contractor abuse is the Alaska 
>Native Corporations, granted eligibility by 
>Congress in 1986 as “minority and economically 
>disadvantaged” businesses that could receive 
>sole-source contracts under the Small Business 
>Administration’s § 8(a) program. The Alaska 
>Native Corporations received a special 
>dispensation in the 1986 law establishing their 
>business eligibility to receive sole-source 
>contracts regardless of value. Regular small 
>businesses cannot receive such contracts over $5 
>million for goods or $3 million for services. 
>Shareholders of the Alaska Native Corporations 
>must be Alaskan natives but the officers and 
>employees need not be natives. The Corporations 
>can also enter into partnerships with non-native 
>companies and perform sole-source contract work 
>provided that the Corporations control a 
>majority of the equity and voting power. If the 
>Corporations conduct 50% of the work they can 
>subcontract to regular corporations.
>Non-competitive contracts awarded by six 
>agencies to the Corporations represented $265 
>million in 2000 and almost $1.1 billion four 
>years later, according to a GAO report, 
>“Contract Management: Increased Use Of Alaska 
>Native Corporations’ Special 8(a) Provisions 
>Calls For Tailored Oversight,”  cited in 
>“Dollars, Not Sense,” that warned that strict 
>oversight of such contracts is needed:
>“The GAO investigation found that federal 
>agencies are awarding no-bid contracts to Alaska 
>Native Corporations [in part because]
>noncompetitive contracts with Alaska Native 
>Corporations is faster and requires less effort than holding a competition
>The GAO report identified specific instances 
>where use of Alaska Native Corporations inflated 
>contract costs. In one case, the State 
>Department awarded a no-bid contract to an 
>Alaska Native Corporation even though the Alaska 
>Native Corporation’s proposed price was double 
>the government’s cost estimate and the final 
>price remained higher than the estimate. In 
>another case, rather than buying water and fuel 
>tanks directly from a manufacturer, the Army 
>awarded a no-bid contract to an Alaska Native 
>Corporation, which had the effect of adding an 
>unnecessary layer of fees to the contract.”
>Clearly the Congress and the public would 
>benefit from the availability of more 
>information about the size, scope and conditions 
>of government contracts. However, as noted by 
>Gary D. Bass, Ph.D., Executive Director of OMB 
>Watch, the database is an essential first step; 
>it will be up to Congress and watchdog groups to 
>be vigilant in monitoring the contracts on the 
>database. Congress has been notoriously weak in 
>scrutinizing government programs and contracts 
>as to whether Federal dollars are spent 
>efficiently and economically and as to 
>Congressional intent. Coburn, in chairing the 
>FFM Subcommittee, has demonstrated what diligent 
>oversight can accomplish. He has shone a light 
>on shameful waste and abuse of taxpayer dollars.
>Too much money has been wasted for too long by 
>the Federal government. Now Coburn and Obama and 
>a bipartisan coalition of Senators are 
>threatening the beginning of the end to business 
>as usual, with the Federal Funding 
>Accountability and Transparency Act. If enacted, 
>the readily searchable database would provide 
>congressional staff and the public, including 
>journalists, with information about how Federal 
>money is spent and by whom. The database may not 
>contain all the answers but it would present 
>information to generate meaningful questions.
>The more Americans learn about how their 
>hard-earned dollars are handled­or really, 
>mishandled­by Washington the more demand there 
>will be for effective, far-reaching reform. Who 
>will dare stop them? There are plenty of 
>powerful politicians and lobby groups who 
>recognize it is in their best interest to 
>preserve the status quo. Let’s hope they fail 
>and that Coburn, Obama and the people will prevail.
>Stephen M. Lilienthal is a policy analyst at the Free Congress Foundation.
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