Category Archives: Oversight/Contract.Management

GSA Chief Seeks to Cut Budget For Audits / Contract Oversight Would Be Reduced

Source: By Scott Higham and Robert O’Harrow Jr., Washington Post, Saturday, December 2, 2006

The new chief of the U.S. General Services Administration is trying to limit the ability of the agency’s inspector general to audit contracts for fraud or waste and has said oversight efforts are intimidating the workforce, according to government documents and interviews. GSA Administrator Lurita Alexis Doan, a Bush political appointee and former government contractor, has proposed cutting $5 million in spending on audits and shifting some responsibility for contract reviews to small, private audit contractors.

State auditor calls for overhaul of laws governing state contracts

Source: By Beth Musgrave, HERALD-LEADER (KY), Thu, Oct. 19, 2006

The state’s top auditor is calling for an overhaul of laws that exempt about $1 billion of state contracts from strict oversight. State Auditor Crit Luallen, in a third and final report on the state’s contracting laws, said the state’s privatization statute is ineffective. Almost all privatization contracts are exempt from strict scrutiny, meaning thousands of contracts to private vendors do not have to go through a cost-benefit analysis before a deal is signed.

…….To illustrate her point, Luallen cited the state’s handling of contracts at the Communities at Oakwood, the Somerset home for the mentally handicapped. The Cabinet for Health and Family Services, which oversees Oakwood, entered into a contract that eventually totaled $17 million for Liberty Healthcare, a private Pennsylvania company, to provide management and staff at Oakwood last year. But those contracts were not covered under the privatization law because the Liberty contract did not call for the replacement of more than 10 state workers.

Instead, Liberty replaced state workers as they left.

Kentucky Auditor press release: State Auditor Crit Luallen Releases Assessment of Kentucky’s Privatization Efforts

Report: Assessment of Kentucky’s Privatization Efforts (.pdf), October 2006

Congress lifts blinds on its spending

Source: By Gail Russell Chaddock. The Christian Science Monitor, September 14, 2006

Coming soon to a laptop near you: how government is spending your federal tax dollars – contracts, grants, and special projects sought by lawmakers. From wartime contracts for Halliburton to earmarks for the Punxsutawney Weather Discovery Center (think “famous groundhog”) in Pennsylvania, all will be listed on a searchable database. It’s the least controversial of all the reforms Congress has considered since last year’s bribery and corruption scandals, and its passage will provide an effective new tool for anyone wanting to look over lawmakers’ shoulders soon after they clear spending bills.

Bill S.2590 – Title: A bill to require full disclosure of all entities and organizations receiving Federal funds.

Beyond Halliburton

Source: Lee Drutman,, May 22, 2006

In the weeks following Hurricane Katrina, there was much hue and cry about the massive no-bid “cost-plus” cleanup and rebuilding contracts going to politically-connected firms like Bechtel, Fluor and CH2M Hill. And sure enough, eight months later, the first audits are in and it is that same old depressing reel of fraud and waste and mismanagement. ……. We’re talking about double-billing for hauling the same debris, hauling extra debris to boost reimbursements, overstating mileage—the same old tricks. As a neat touch, inspectors found that Army Corps of Engineers officials had an “informal agreement” not to challenge bills that exceeded estimates by 50 percent.

…… The argument then and today is that turning to the private sector harnesses the power of competitive markets. Since companies must compete for contracts, this competition should discipline them into using taxpayer money more efficiently, especially compared to the dreaded government bureaucracy. So why hasn’t this worked? The first reason is that contracting out requires monitoring—and monitoring requires actual people. Over and over again, reports of contractor fraud find at best minimal oversight.

SHORT ON OVERSIGHT / States and localities are outsourcing more of their services, but management of the contracts is in dire need of an upgrade.

Source: By Katherine Barrett & Richard Greene, Governing Magazine, May 2006

The exact numbers are a mystery. Even Khi Thai, director of the Public Procurement Research Center, says that “no one even really knows the extent of outsourcing in the states.” The best guess is that somewhere between 15 and 20 percent of all state spending is contracted out to third parties. That adds up to a total that may be in excess of $200 billion. The real trouble isn’t in the numbers. It’s in the absence of solid management for privatized service contracts. Problems are common all along the route–from the decision to outsource a government service, to overseeing the effort, to ensuring that the contractor delivers what’s promised.