End Run, Via Alaska

Government Inc. directs your attention to this story in The Post, about an FDA public relations contract.

It speaks volumes, through many e-mails, about the state of federal procurement in America thes days.

Contracting specialists contacted about the circumstances seemed exasperated by both the assiduous efforts to avoid competition (through the use of an Alaska native corporation), and the blatant plan to direct the ANC to pass on the work to a Washington D.C. public relations firms.

The top:

"A competition, as prescribed by government policy, was not held to get the lowest bid for the $300,000 contract. Instead, FDA officials came up with a plan to ensure the work would go to a Washington public relations firm with ties to the FDA official arranging the deal, according to an examination by The Washington Post.

"The plan used a circuitous route around the standard government contracting procedures. The contract was awarded in July to Alaska Newspapers Inc., a firm owned by an Alaska Native corporation that does not have to compete for federal work because it qualifies for special set-asides. The idea was for ANI to hand over the work to Qorvis Communications, the Washington firm, documents show.

"After being made aware of The Post's findings, FDA deputy commissioner John Dyer said this week that he had suspended the contract and ordered an independent investigation.

NEWS FLASH: The Energy and Commerce Committee this afternoon released several letters to the FDA and the companies involved in the contract, seeking more details. Here's the letter to the Department of Health and Human Services, blasting the contract as a "reckless use of taxpayer dollars" and "an affront to the American taxpayer."

More from The Post story:

"Steven Schooner, co-director of the government procurement law program at George Washington University, said he has rarely seen such a detailed example of officials and contractors working to avoid competition.

"'The story line is as bad as anything I've ever heard,' he said. 'It's not transparent. It's not competitive. It's not arm's length.'"

"Rep. John D. Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, which oversees the FDA, said his panel also would investigate the contract.

"'The agency chose to use its limited resources to save face instead of saving the public health,' said Dingell, whose committee has led the oversight of the FDA. 'This sham of a contract calls into question the integrity of federal contracts awarded to small businesses and Alaska Native corporations.'"

By Robert O'Harrow |  October 2, 2008; 3:03 PM ET
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Sorry, but this just isn't all that shocking to people in the game (on either side). "Shopping for a vehicle" is common practice -- i.e., looking for a non-competitive or pre-competed contract mechanism, in order to avoid the hassles and delays inherent in doing procurement by the book. You'd be surprised at how many companies out there (especially 8a's) make a sizeable chunk of change by serving as pass-throughs for bigger firms. The Alaska native firms serve the same role, just on a grander scale. Questionable, unethical even? Sure. But illegal? Not if you're careful in how you structure it.

Sometimes it's about favoritism and paybacks, for sure; but mostly it's about finding the path of least resistance. Especially for relatively small procurements like this (300k is not that big a contract), most contracting specialists would look first for an established vehicle rather than doing it from scratch. That doesn't make them corrupt or lazy -- they're short-staffed and dealing with a complex, inefficient system, so they do what they have to do. As long as the vendor isn't somebody's brother-in-law, or blatantly unqualified to do the work, you're good to go. Not the ideal, certainly, but that's reality.

Posted by: Been on Both Sides II | October 3, 2008 9:21 AM

Just another BUSH/Cheney getting around the rules at the behest of the taxpayer. When will it stop -- not until we get the Republican crooks out of Washington. Hopefully January of 09.

Posted by: conserned | October 6, 2008 2:10 PM

The "conserned" who commented that BUSH/Cheny are to blame, think again - the crooked Senator from Alaska is to blame for the ANC mess which he created several years. Ted Stevens created the contracting vehicle that makes this highway robbery legal. Below is testimonial from Ted Stevens own web site where he is taking credit for squashing the attempt to reform the system. He's so powerful - he can even get the House of Representatives to take ANC reform out of the bill.....Whose fault is this mess? Where are the real minority contractors - why aren't you yelling and screaming about this?

Excerpt from Ted Stevens Web Site:

WASHINGTON, D.C. – The U.S. House of Representatives today passed the fiscal year 2009 Defense Authorization Act which contains several key provisions championed by Senator Ted Stevens (R-Alaska). At the request of Senator Stevens, a provision harmful to Alaska Native Corporations (ANCs) was removed from the bill.

“This represents a big victory for Native Alaskan small businesses,” said Alaskan Alma Upicksoun, who is on the Native American Contractors Association’s board of directors. “A big thanks again to Senator Stevens and his staff for their dogged and positive efforts on behalf of all of us.”
“I am proud to have joined a strong coalition of Native American advocates in stopping another attack on 8(a) firms,” said Senator Stevens. “Participation in this program has been invaluable to our ANCs and I am relieved we have once again been successful in defending it.”

The original version of the House Defense Authorization bill contained a provision, section 4101 of Title 4, that would require some government agencies to minimize awarding of contracts to ANCs, Native Hawaiian Organizations, and Indian tribes under the Small Business Administration’s 8(a) program. While some small businesses would have been exempt from this reduction in the awarding of contracts, ANCs would have received no such exemption.
“If passed, Section 4101 would have significantly limited the ability of ANCs to obtain government contracts. The 8(a) program is critical to Alaska Native businesses, which generate revenues, jobs, and economic growth for their respective communities that already suffer from high rates of unemployment and poverty,” added Senator Stevens.

During the 1980's and 1990's Senator Stevens helped craft the series of legislative initiatives that have allowed ANCs to participate in the SBA 8(a) program and effectively pursue government contracts. In recent years, Senator Stevens has successfully worked to defend special provisions designed to assist Native American firms and their communities.

Posted by: anc contract abuse | October 6, 2008 4:48 PM

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