Loophole?

So who exactly put that loophole in the proposed OMB rule last year? You know, the one that would exempt U.S. contractors in foreign countries from having to report waste, fraud or abuse they encounter while doing work for the government?

No way to know exactly just yet. That's because the White House has missed a congressional deadline for turning over documents about the decision. This according to the Associated Press, which first wrote about the mystery.

This is no small thing. The rule was supposed to apply to all U.S. contracts. That's more than $400 billion a year.

In a story yesterday, the AP said:

"The Bush administration has delayed delivering documents to Congress explaining how a multibillion-dollar loophole exempting overseas work from scrutiny was slipped into a rule intended to crack down on fraud in government contracts."

"A House panel will hear April 15 from White House and other administration officials about the loophole, which drew protests from Democrats and Republican lawmakers alike and been disavowed by Attorney General Michael Mukasey".

"'If this loophole was a bureaucratic mistake as some in the administration have claimed, then our requests should be easy to meet,' Rep. Peter Welch, D-Vt., said in a statement Monday. "'This should be simple. Someone in the administration made this change and it should be easy to explain why. A delay only raises more questions.'"

A government official familiar with the episode told Government Inc. that the unwitting perps are folks at the Defense Acquisitions Regulation Council, who inserted the exemption. They are saying they did so because it had been done in the past -- based on acquisition rules going back two decades -- and they assumed that the failure to include the exemption was an oversight. Here's how the exemption was worded.

On Monday, Democrats on the House Oversight and Government Reform Committee introduced legislation that would close the loophole, according to the National Journal's CongressionalDaily.

Let's see what comes out in the hearing next week.

By Robert O'Harrow |  April 9, 2008; 7:00 AM ET omb
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Seek and yee shall find...it's out there...and 'very well planned'. I would refer you...but there's a legal disclaimer protecting them to even 'refer' to the site without their permission.

Posted by: Research | April 11, 2008 11:35 PM

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