POGO - Project on Government Oversight
Contractors Feting Themselves
By Danielle Brian
Last week, the information technology (IT) industry trade publication Government Computer News, held its annual Awards Gala at the Washington Hilton - known as the Academy Awards night for government contractors.
This contractor-sponsored extravaganza honored government and industry partnering to achieve “excellence.” We’re not sure what that means exactly, but a number of reports from the dinner indicate that contractors feted themselves for landing large government contract awards, and for generally doing everything they can to permeate all facets of government agency operations, making the distinctions between public servants and their contractor “partners” ever more blurred. Particularly disturbing were the honors bestowed on current government executives, including General James Cartwright, commander of U.S. Strategic Command, and John Johnson, Assistant Commissioner of the Federal Acquisition Service at the General Services Administration. These government leaders may very well merit praise for their service on behalf of the public, but it is quite disconcerting to see that praise lavished upon them by contractors who receive billions of dollars a year in contract awards from the organizations these people run.
The sponsors of the event claim that over 1,000 people attended the black-tie reception and dinner in the main ballroom where they dined on scallops and prime rib. It was reportedly an impressive sight, with a multimedia display, and videos of leading government and industry executives touting the benefits of “partnering.” As might be expected, the event was underwritten by “sponsors,” which included virtually every large and mid-sized government IT contractor, including Lockheed-Martin, Boeing, and Northrop-Grumman.
However, everyone I talked to said the evening’ highlight was clearly when Hall of Fame Inductee and contractor lobbyist, STEVEN KEMLAN spoke. For those of you who are unfamiliar with Mr. Kelman, he is widely credited as being the architect of our government’s current contracting system. Kelman, who as always was introduced as a Harvard Kennedy School professor and former OMB Office of Federal Procurement Policy Administrator (ignoring his role as industry lobbyist), addressed the crowd twice -- the first time through a short video sequence streamed on the large display screens in the banquet hall, and then again “live” when he was presented with his Hall of Fame award.
While we don’t have a transcript of Mr. Kelman’s comments, reports indicate that in his video presentation, he made a point of stating that transparency, small business interests, and accountability are not key issues in government contracting. According to Mr. Kelman, the key issue is supporting the accomplishment of agency mission. We don’t have a problem with supporting accomplishment of agency mission, but we think that transparency and accountability are pretty important too. In fact, if you are successfully accomplishing the agency’s mission, accountability shouldn't be that scary, should it? And speaking of mission accomplishment, we really wonder whether the contractor “partners” are focused on contributing to these goals in a cost effective manner.
Kelman continued with his usual theme of criticizing what he calls the “fear industry”, which this time he defined as including Inspectors General, some reporters and some elected officials. (It appears he doesn’t understand that these independent overseers are necessary because too many times, the very contracting officers Kelman thinks he is defending, like Bunny Greenhouse, tried to fix the system from the inside but were prevented at every step.) However, what took several people in the audience aback, along with those of us at POGO, was Kelman’s comparison of these “fear industry” mongers, as being akin to 19th century management in their attitude toward workers in the New England textile mills. One witness marveled that he even went so far as to compare the “fear industry” to -- get this -- slave-masters, and civil servants to slaves.
Really? Those who dare to question or even criticize the current contracting system are that bad? Look, we share Kelman’s loyalty to civil servants. However, the civil servants we hear from tell us their biggest concern is that contractors are increasingly influencing or even dictating government policies, making it harder for them to do their job protecting the public interest. The good news is some of the high rollers in the government contracting industry who were there to hear this craziness were themselves appalled. They are beginning to remember that they are taxpayers too, and they are quietly glad there are some people out there who are paying attention.
Government Computer News, host of the awards banquet, is published by the 1105 Government Information Group. From their site:
About 1105 Government Information Group
The ceremony " ... follows recent news of the formation of 1105 Government Information Group via the merger of FCW Media Group ... and Post Newsweek Tech Media (publishers of Government Computer News , Washington Technology , Defense Systems and FOSE).
Albert J. Weatherhead III and Richard W. Weatherhead Professor of Public Management
Kennedy School of Government
79 JFK Street
Cambridge, MA 02138-5801
1993-1997 Administrator, Office of Federal Procurement Policy
Office of Management and Budget, Washington D.C.
1986-1992 Professor of Public Policy
Harvard University, John F. Kennedy School of Government
1978-79, 1981-86 Assistant and Associate Professor of Public Policy
Harvard University, John F. Kennedy School of Government
1979-81 Associate Director for Management Planning
Federal Trade Commission
Bureau of Consumer Protection
1975-76 Research Associate
Harvard School of Public Health
1973-75 Teaching Fellow in Government
1970 A.B., Harvard College, summa cum laude (Social Studies)
1978 Ph.D., Harvard University (Government)
On Steve Kelman and Halliburton
From the book, The Halliburton Agenda: The Politics of Oil and Money, by Dan Briody:
Kelman's Highly Implausible Propaganda:
by Steven Kelman
November 6, 2003
Reprinted from Washington Post
There has been a series of allegations and innuendos recently to the effect that government contracts for work in Iraq and Afghanistan are being awarded in an atmosphere redolent with the "stench of political favoritism and cronyism," to use the description in a report put out by the Center for Public Integrity on campaign contributions by companies doing work in those two countries. ...
The premise of the accusations is completely contrary to the way government contracting works, both in theory and in practice. Most contract award decisions are made by career civil servants, with no involvement by political appointees or elected officials. In some agencies, the "source selection official" (final decision-maker) on large contracts may be a political appointee, but such decisions are preceded by such a torrent of evaluation and other backup material prepared by career civil servants that it would be difficult to change a decision from the one indicated by the career employees' evaluation.
Having served as a senior procurement policymaker in the Clinton administration, I found these charges (for which no direct evidence has been provided) implausible. ...
Many people are also under the impression that contractors take the government to the cleaners. In fact, government keeps a watchful eye on contractor profits -- and government work has low profit margins compared with the commercial work the same companies perform. ...
As for the much-maligned Halliburton, a few days ago the company disclosed, as part of its third-quarter earnings report, operating income from its Iraq contracts of $34 million on revenue of $900 million -- a return on sales of 3.7 percent, hardly the stuff of plunder.
It is legitimate to ask why these contractors gave money to political campaigns if not to influence contract awards. First, of course, companies have interests in numerous political battles whose outcomes are determined by elected officials, battles involving tax, trade and regulatory and economic policy -- and having nothing to do with contract awards. Even if General Electric (the largest contributor on the Center for Public Integrity's list) had no government contracts -- and in fact, government work is only a small fraction of GE's business -- it would have ample reason to influence congressional or presidential decisions.
Second, though campaign contributions have no effect on decisions about who gets a contract, decisions about whether to appropriate money to one project as opposed to another are made by elected officials and influenced by political appointees, and these can affect the prospects of companies that already hold contracts or are well-positioned to win them, in areas that the appropriations fund. ...
The whiff of scandal manufactured around contracting for Iraq obviously has been part of the political battle against the administration's policies there (by the way, I count myself as rather unsympathetic to these policies). But this political campaign has created extensive collateral damage. It undermines public trust in public institutions, for reasons that have no basis in fact. It insults the career civil servants who run our procurement system. ...
The charges of Iraq cronyism encourage the system to revert to wasting time, energy and people on redundant, unnecessary rules to document the nonexistence of a nonproblem.
If Iraqi contracting fails, it will be because of poorly structured contracts or lack of good contract management -- not because of cronyism in the awarding process....