Federal Contract Law | A Procurement System in Crisis

"Building a better staff takes time, but there is no more important priority for the system." Joseph J. Petrillo

I've worked in procurement for over three decades. In all that time, the public perception of federal procurement has never been worse than now.


Bad news just keeps piling up. The Darleen Druyun scandal reached high into the ranks of government and business. On its heels came allegations of questionable contracting practices in Iraq, including outright bribery. Then we learned of sole-source contracts for Katrina response. (See my column, GCN, Dec. 12, 2005.) At first, the Federal Emergency Management Agency promised to phase them out. But then, buried in a recent Saturday edition of the Washington Post, was an item saying that FEMA would not recompete those sole-source contracts after all.


September 2005 brought the resignation and indictment of the administrator of the Office of Federal Procurement Policy. That cloud had a silver lining: It removed a poorly qualified person from the top policy job in procurement. And the recent guilty plea of former Rep. Randall 'Duke' Cunningham shows that we are not immune to the kind of contract corruption common in banana republics.


Any one of these is regrettable; together, they amount to a train wreck. This is worse than overpriced hammers and toilet seats.


Ironically, our nation is more dependent on contractors today than ever before. We are supporting three different military forces: a strategic nuclear arm, a conventional force with expeditionary emphasis and a growing constellation of special forces. Our social-welfare system confronts the challenges of an aging population. And homeland defense, an afterthought in the ICBM era, is now a priority. We need government to do more and do it better. To do that, government needs contractors.


So, how do we rebuild the ailing contracting system and restore trust in it? One thread running through most of these scandals is that a single individual had excessive influence over contracting decisions. There needs to be a system of checks and balances to make sure that no one corrupt or misguided official can manipulate the system. Vesting too much power in one person may be efficient, but it invites abuse.


To be equal partners, procurement staffs need more and better people. There are too few trained personnel to handle the increasing volume of contracts. Building a better staff takes time, but there is no more important priority for the system.


We also need to take a hard look at pay levels. Government workers with major responsibilities earn a fraction of what their private-sector colleagues make. Compensation for government executives will never reach industry levels, but the current gap may be too large. It shouldn't be necessary for a public official to take a vow of poverty in order to serve.


Federal managers can do better. They must reward accomplishment consistently and address problems squarely. Political loyalty is no substitute for simple competence. Agencies that do a better job of contracting fix mistakes when they come to light. Others 'circle the wagons' and defend their errors, instead of learning and improving. (In my experience, military agencies seem to do a better job than their civilian counterparts.)


Congress must do its part. At a minimum, it needs to reverse its recent course and provide funds to hire, train and retain a professional procurement staff.


Congress also makes its own unique contributions to this mess. 'Earmarks' (appropriations for specific pet projects) are out of control. They corrupt both the legislative process and the contracting system. But I'm not optimistic about better conduct on the Hill. Pork-barrel politics will persist so long as it gets legislators re-elected.


Joseph J.Petrillo is a lawyer with the Washington law firm of Petrillo & Powell. E-mail him at jp@petrillopowell.com.

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