Category Archives: Oversight/Contract.Management

Standing Guard: How Unaccountable Contracting Fails Governments and Taxpayers

Source: In the Public Interest, December 18, 2014

From the summary:
When governments outsource vital public services, how carefully are contractors being watched? As local and state governments increasingly contract out critical public services that are crucial to the well-being of the community, the need for robust contract oversight is pressing. Yet, recent research and the experiences of cities and states across the county show that too often contract oversight is lax.

Robust oversight means that the government can hold contractors accountable for their performance, and ensure that the public receives quality services at a reasonable cost. Proper oversight can protect public health and safety. Strong oversight allows governments to catch waste, fraud, and abuse in real time instead of long after the fact, and correct mistakes before they result in serious harm.
Lax oversight has detrimental impacts for the people served by a program or service, and for the public at large. Poor oversight of government contracts can mean:
– Wasted public tax dollars
– Fraud and abuse
– Poor quality of service and underperformance by contractors
– Risk to vulnerable residents and to public health and safety

Problems with contract oversight are pervasive. These problems occur in cities and states across the country and across all sectors of government, including health and human services, criminal justice, information technology, education, public works, and more. Recent research and numerous examples illustrate why contract oversight often falls short. This report discusses common problems and the real world consequences of lax oversight, and provides policy recommendations to help cities and states improve their oversight of government contracts. The appendix provides additional examples of recent government contract problems not included in the report.

On privatization, Gov. Christie should practice, not preach, government transparency: Opinion

Source: Charles Wowkanech, president of the New Jersey State AFL-CIO, Star-Ledger, December 16, 2014

Gov. Chris Christie often talks about the need for transparency in government. He frequently points to his own administration as an example of how to carry out the functions of government in a forthcoming and above-board manner. Why, then, has the governor vetoed a bill that establishes oversight for deals that privatize government services?
Christie Nixes NJ Privatization Standards Bill
Source: Joshua Alston, Law360, August 11, 2014
(subscription required)

New Jersey Gov. Chris Christie has vetoed a bill to install standards for service and workforce levels for privatized state contracts, saying the legislation is ideology-driven opposition to his privatization efforts and would create needless red tape. In a message released Friday, Christie issued an absolute veto of S-770, a bill aimed at blocking private state contracts unless the state is assured privatization would achieve considerable cost savings without resulting in reductions in the quality of service or the workforce levels the state maintains.

Bill regulating privatization efforts heads to Christie’s desk
Source: Michael Linhorst, The Record, June 16, 2014

A bill that Democrats say would guard against “irresponsible” plans to outsource government services is heading to Governor Christie’s desk. The bill, which passed the Assembly 48-30 today, would forbid privatization unless real cost savings could be shown. In addition, the work environment, including wages would have to stay the same or be better than the public sector and there would also be public disclosure requirements….

Editorial: Privatization deals / Oversight needed
Source: Press of Atlantic City, May 2, 2014

Democratic leaders in the state Senate are pushing a bill that would increase oversight of deals privatizing government services. The bill will never become law – not as long as Chris Christie, or any other privatization-loving Republican, is governor. And it is a blatant attempt to curry favor with public-worker unions, which of course lose members and jobs when government services are privatized. But all that aside, the measure (S770) is sound. Indeed, for the most part, it isn’t increasing oversight of privatization deals as much as it is establishing oversight for the first time.

State releases salary data from Charter Day School Inc.

Source: Gareth McGrath ∙ ∙ November 17, 2014

The N.C. Department of Public Instruction (DPI) late Monday afternoon released salary information from Charter Day School Inc. that the school group had marked as “trade secrets” and asked not to be made public. Monday’s action brings to an end the more than monthlong back-and-forth between Charter Day and state regulators over whether the salaries of Roger Bacon Academy employees, including school headmasters and assistant headmasters, should be considered public or private information. Charter Day contracts with the for-profit Roger Bacon Academy to manage and run its schools and had repeatedly stated it didn’t have the salary information for those employees….

The Cost of D.C. Council’s Power Over Contracts

Source: Patrick Madden, WAMU, 2014

Does campaign cash have undue influence over how District of Columbia lawmakers approve contracts? In this special investigative report, WAMU 88.5’s Patrick Madden follows the money and explores whether the D.C. Council is perpetuating a “pay-to-play” environment for city contractors. All contracts worth more than $1 million go to the D.C. Council for review after a city agency has picked the winning contractor—a power granted to no other state-level legislature. WAMU and the Investigative Reporting Workshop used legislative records to examine more than 1,000 contracts that were sent to the D.C. Council for approval from 2007 to 2014. The reporters also analyzed more than 100,000 campaign contributions to D.C. officials and candidates using public records from the Office of Campaign Finance. The database includes donations from contractors, their employees and their family members. …
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Dynamic Regulation via Governmental Contracts

Source: Wulf A. Kaal, University of St. Thomas (Minnesota) Legal Studies Research Paper No. 14-38, 2014

From the abstract:
Dynamic elements can be included in the rulemaking process through intra- and inter-jurisdictional feedback effects that improve the availability and quality of information for rulemaking. Key features associated with governmental contracts, such as the corporate wrongdoers’ self-reporting, preemptive remedial measures instituted by the entity to avoid corporate criminal indictment, and the government’s investigation of specific corporate wrongdoing, facilitate multilevel feedback effects that increase the availability and quality of information for rulemaking. Governmental contracts can thus integrate dynamic elements in rulemaking.

Monroe County Golf Course Contract Management

Source: State of New York, Office of the State Comptroller, Report of Examination, 2014M-111, August 2014

From the press release:
Monroe County officials failed to properly manage or enforce the county’s contract with Tindale Inc. for the operation of the county’s three golf courses, allowing the vendor to pocket nearly $250,000 that should have been spent on improving the courses even as the operator drifted toward insolvency, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. … Because of the lack of oversight, Tindale did not perform or pay for a number of required contractual duties, as well as expenditures it promised to make, and kept funds totaling more than $246,000 that should have been spent on the golf courses. For example, Tindale’s capital expenditures listed for 2012 showed that $58,660 out of the $100,000 required annual investment was actually spent for non-capital purchases or routine maintenance. As a result, the county will need to invest additional funds into the golf courses that should have been covered by Tindale. During a walkthrough of the golf courses, auditors observed various benches, gazebos and pathways that were in disrepair, a partially submerged golf cart in a course pond, and downed trees. …

IRS Failed To Do Background Checks On Contractors

Source: Stephen Ohlemacher, Associated Press, August 14, 2014

The IRS failed to do background checks on some private contractors who handled confidential taxpayer information, exposing more than a million taxpayers to an increased risk of fraud and identity theft, a government investigator said Thursday. In one case, the IRS gave a printing contractor a computer disk with names, addresses and Social Security numbers of 1.4 million taxpayers, but didn’t require a background check for anyone who worked on the job, said a report by the Treasury inspector general for tax administration.

Misbehaving Contractors Might Be in Luck At These Agencies

Source: Charles S. Clark, Government Executive, August 8, 2014

Agency compliance with White House reporting requirements on past performance of contractors varies widely and falls short of targets set by the Office of Federal Procurement Policy, auditors found. For the past six years, the Obama administration has sought to equip contracting officers with richer information on the past performance of contractors before making their next award, the Government Accountability Office noted in a report released Friday. Under the 2013 National Defense Authorization Act, the White House procurement office is required to improve oversight and enforcement of agency reporting on past contracting by working through the Federal Acquisition Regulation Council to send reminder memos, assess the quality of evaluations of contractors, direct development of a compliance tracking tool and set targets for some agencies….
Contractor Performance: Actions Taken to Improve Reporting of Past Performance Information
Source: Government Accountability Office, GAO-14-707, August 7, 2014

From the summary:
The Office of Federal Procurement Policy’s (OFPP) strategy to improve the reporting of past performance information relies on increased oversight and enhancements to guidance and acquisition regulations. Since 2009, OFPP has taken several actions to increase the number and quality of past performance submissions available to source selection officials, including:
– emphasizing reporting requirements through memos to agency officials;
– assessing and reporting on the level of compliance and quality of evaluations;
– directing the development of a compliance tracking tool;
– setting performance targets for certain agencies;
– directing the consolidation of systems for entering past performance information; and
– developing government-wide past performance guidance.

To implement provisions of the act, OFPP and the Federal Acquisition Regulatory Council (FAR Council) worked to enhance requirements for assigning responsibility and accountability; implement standards for complete evaluations; and ensure submissions are consistent with award fee evaluations. Recently, OFPP and the FAR Council revised the timelines for the contractor comment process in accordance with the 2013 statutory requirement.

Although agencies generally have improved their level of compliance with past performance reporting requirements, the rate of compliance varies widely by agency and most have not met OFPP targets. For the top 10 agencies, based on the number of contracts requiring an evaluation, the compliance rate ranged from 13 to 83 percent as of April 2014.

Rebooting NYC gov’t’s broken IT-contract rules

Source: Scott M. Stringer, NY Post, August 2, 2014

…Irony aside, it’s time for the city to end the days of rubber stamping IT-contract bills “approved” without more rigorous oversight, and paying them without knowing exactly what it paid for. That’s why my office recently added a new weapon to the city’s arsenal to combat out-of-control spending and to prevent fraud: Comptroller’s Directive 31.

Directive 31 requires city agencies to institute a series of common-sense reforms on IT contracts, including:
- Requiring time sheets to be submitted within one month of the work being performed, and to include a detailed description of the type of work completed, as well as where the work was done.
- Verifying an individual’s qualifications for the rate at which the contractor is billing the city.
- Having city employees with expertise on the project certify that time sheets are accurate and correspond to contract terms, rather than letting consultants vouch for themselves.
- Ensuring that agreed-upon markups for personnel and material costs are not exceeded….