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Federal Contracting Abuse

 

What's New

After years of widespread waste, fraud, and abuse that has cost taxpayers billions, Congress and the Obama administration are finally getting serious about fixing federal contracting.

President Barack Obama has ordered a government-wide review of the contracting process for all federal agencies this summer in order to restore competition, transparency, and accountability and to ensure that contracts are awarded based on merit rather than nepotism and political ties.

Earlier this year, Congress overwhelmingly passed and the President signed into law the Weapons Systems Acquisition Reform Act to bring greater accountability for taxpayer dollars to the Department of Defense. This new law included strong language around conducting independent cost assessments, preventing those who recommend an expensive new system from building it and clamping down on those who try to get around the new rules. TexPIRG supported the strongest possible language on these topics, and joined with a diverse group of partners to that end in sending a letter to leaders in Congress. The acquisition process is just one aspect of federal contracting that we’ll address in the months to come, so stay tuned.

Since 2003, Pentagon auditors have identified 32 cases of suspected federal contracting fraud in Iraq, Afghanistan and Kuwait. TexPIRG is working to assure federal contractor abuse and fraud at the Pentagon and other government agencies are eliminated so taxpayers get their money's worth.

Overview

The federal government spent $422 billion in taxpayer funds last year on outside contracts.  It is the fastest growing portion of federal discretionary spending, increasing by 100 percent between 2000 and 2006. The projects cover a wide range of expenses from equipment for soldiers in Iraq to relief efforts for victims displaced by Hurricane Katrina. 
 
Americans are familiar with the troubling and high profile scandals involving Blackwater and Halliburton. Sadly, the lack of accountability in federal contracting is not limited to these companies. After Hurricane Katrina, the Federal Emergency Management Agency (FEMA) awarded no-bid contracts to a company with a history of defrauding the government. The IRS hired a firm that had experienced several serious data breaches of customer information to manage and secure sensitive data.  The Army renewed contracts with companies that failed to test if the aircraft equipment they built worked properly. 
 
If Congress is serious about establishing fiscal responsibility and accountability, they must follow up on efforts to remove the secrecy that surrounds contract awards and make information available to the public. Congress must increase competition and reduce the number of no-bid contracts. And they should develop standards that punish bad behavior. Companies with shoddy or deceitful track records must not have immediate access to additional federal contracts. The current lack of accountability provides no incentive to ensure that the public is getting its money’s worth.



 

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