Kudos to Obama for Trying to Reduce Contractor Waste, Fraud and Abuse

by Deb Cupples | We at Buck Naked Politics have an inexplicable fascination with government contractor fraud,  which has led us to write more than 150 blog posts on the topic (examples are at the end of this post). 

Thus, I am thrilled the President Obama recently decided to take some sort of step toward stopping the massive flow of wasted tax dollars to unscrupulous private contractors.

The Washington Independent reports:

"Obama today issued a memorandum to the heads of all the executive departments agencies directing them to restrict no-bid contracts; to rein in outsourcing of “inherently governmental activities”; and to, if necessary, cancel wasteful contracts outright. The crucial paragraph, even if it’s written in bureaucratese, particularly calls out the Defense Department:

'I hereby direct the Director of the Office of Management and Budget (OMB), in collaboration with the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration, the Administrator of General Services, the Director of the Office of Personnel Management, and the heads of such other agencies as the Director of OMB determines to be appropriate, and with the participation of appropriate management councils and program management officials, to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner.  Such corrective action may include modifying or canceling such contracts in a manner and to the extent consistent with applicable laws, regulations, and policy....'

"Obama went further in remarks at the White House, calling it a “false choice” to say that protecting the country requires acquiescence to Pentagon waste. “In this time of great challenges,” he said, “I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich.” He also lent support to Sens. Carl Levin (D-Mich.) and former presidential rival John McCain’s (R-Ariz.) legislation to create new procurement oversight positions at the Pentagon. “The days of giving defense contractors a blank check are over,” Obama said." (Washington Independent) 

For me, the jury is still out until I see results -- but at least President Obama is taking steps in the right direction.

That paragraph from Obama's memo indicates that he knows that defense contracting is not the only crooked game that wastes billions of our tax dollars.

There are practical ways to reduce those costs of waste, fraud and abuse.

First, President Obama must ensure that executive-branch agencies start negotiating and drafting contracts in ways that protect the taxpayers instead of the private contractors.  That includes refusing to award cost-plus contracts, which are notorious for driving up the costs of goods and services (i.e., wasting money).

Second, President Obama must ensure that all executive-branch agencies that deal with private contractors are well enough staffed and are directed to adequately monitor contractors' performance.  If he fails to do that, then contractors will continue to have abundant opportunities to get away with waste, fraud and abuse.

Third, President Obama must crack down on errant contractors by directing executive agency heads to stop doing business with contractors that have repeatedly shown evidence of having committed over-billing, waste or fraud.  Contractors can be barred from getting federal contracts if they plead or are found guilty of crimes.  Consequently, many contractors simply strike plea deals with the Justice Department -- without admitting or denying guilty -- and they continue to get big government contracts.

Fourth, President Obama must demand that his Justice Department pursue False Claims Act cases (i.e., contractor-fraud cases) that whistle blowers bring to the Justice Department and that are supported by adequate evidence.  If there continues to be a failure to adequately enforce the False Claims Act (as there was during President Bush's tenure), then private contractors will continue to cost us taxpayers far more than they should.

Memeorandum has commentary.

Related Buck Naked Politics Posts:

* High Cost of Private Contracting

* Business as Usual: Doctors Charged with $10 Million Medicare Fraud

* Insurance Companies Get Away with Over-billing Medicare

* AT&T to Pay $8.2 Million to Settle False Claims Act Case

* Investigators Look at Bribery by Senior Military Officers, Should Look Higher

* KBR to Pay $579 Million to Settle Bribery Charges

*  Inspector General Blocked Investigations into Waste & Fraud?

* Have U.S. Officials Protected Blackwater?

* Time to Get Really Serious about Contractor Fraud

* Billions over Baghdad: Poor Accounting Allowed Waste & Fraud

* Yet Another Contractor Bilks Taxpayers

* How the Energy Dept. Incinerated Tax Dollars

* New Orleans Still Suffering after 2 Years and Billions of Tax Dollars

* How the Defense Dept. Flushes Dollars Down Latrine   

* U.S. Embassies: Still More Examples of Contractor Problems

* Contractors Offering Bribes to Army Personnel?

* Taxpayers Losing Money to Engorged Contractors

* Audit Red-Flags Contractor in Iraq

* Defense Dept. Rewarding Bad Contractor Performance?

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Comments

[Kyle]

Funny there is an article about Obama trying to reduce fraud, anyone else read any articles about blaggo?! If you pretend that this corruption just missed Obama, you are insane, and the liberal media will never show it anyways....

[flowerplough]

Well, then, kudos to George Bush for trying to reform Fannie Mae and Freddie Mac, too. From the Paper of Record, the NYT: September 11, 2003,

" The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry..."

And Bahney Fwank, D-Massachusetts, the ranking Democrat on the Financial Services Committee, first House member to come out of the closet voluntarily, and also the first member of the House to be censured for providing the apartment out of which a gay boyfriend ran a gay prostitution ring said, "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

[Ron Russell]

I agree, the government should keep closer tabs on contracts released to private companies there is a great deal of corruption. Obama, however seems to point the finger at private companies more than the finger at government corruption. Needs to be more of a balance.

[Deb]

Hi Russell,

OF COURSE he points the finger at private companies: they're the ones reaping the biggest benefits from the fraud. They don't just accidentally get caught up in it.

During the Bush years, executive agencies were notorious for turning a blind eye to contractor waste and fraud -- partly due to staffing cutbacks that President Bush had called for.

During the Bush years, our Justice Department was notorious for refusing to join whistle blower suits (esp. regarding Iraq-war contractors) despite solid evidence of False Claims Act violations.

I'm HOPING that it'll get better under Obama -- especially during these times that every tax dollar counts.

We'll see.

[Deb]

Hi Flower,

You're going to miss crucial info if you keep viewing our nation's political goings on like an R vs. D football game -- at which you must always defend the Rs.

Corruption is not limited by party labels.

Fact: the Bush Administration paid lip service to reforming Fannie and Freddie - -largely because big Wall Street players to which Bush was beholden had wanted Fannie to be able to take loans off their hands (e.g., Countrywide)

Fact: the Bush Administration pushed for a $40 billion increase in Fannie's ability to buy subprime loans.

Barney Frank -- gay or not -- called for the lowering of Fannie's subprime-loan buys while the Bush Adminsitration called for increaseas.

Frank also publicly called for the tightening up of restrictions on subprime lending.

I got the Frank stuff from his very detailed rebuttal re: a Wall Street Journal editorial.

http://www.huffingtonpost.com/rep-barney-frank/wall-street-journal-edito_b_150350.html

The details are concrete enough (including dates) that you could easily search Google and see if Frank's sources reflect what he says they do.

I'm not suggesting that Frank does everything right, but he was right re: Fannie, Freddie and the subprimes.

[Deb]

HI Kyle,

I don't pretend anything. My eyebrows were raised high as mountains on my forehead when I learned about Blago.

That has NOTHING to do with my blog post, which is about the need for the executive branch to finally crack down on contractor fraud.

If you're a true fiscal conservative, then you should want the same -- because we taxpayers have lost tons of money due to contractor waste and fraud.

I hope that Obama does it. We'll see.