With the recent Democratic takeover of Congress, the federal contracting community should expect significant changes and increased oversight. Rep. Henry Waxman (D-CA), Chairman of the Oversight and Government Reform Committee (the Committee); is spearheading many oversight and government reform initiatives. As anticipated, Rep. Waxman has already increased the Committee's oversight functions, particularly in the areas of Homeland Security contracts, Iraq reconstruction, prescription drug pricing, and GSA procurements. Additionally, on February 12, 2007, Rep. Waxman introduced two bills: (i) the "Executive Branch Reform Act of 2007," and (ii) the "Whistleblower Protection Enhancement Act of 2007."

Oversight Investigations

The Committee has broad oversight responsibility, which includes overseeing the organization and operations of federal agencies to determine whether agencies are properly administering and executing laws and programs. The Committee may also, at any time, conduct investigations on any matter regardless of whether another standing committee has concurrent jurisdiction. In February, the Committee held oversight hearings on waste, fraud, and abuse of taxpayer dollars related to the following contracting activities:

  • Iraq reconstruction and the government's reliance on private security contractors.
  • The Department of Homeland Security's management of large contracts involving "systems integrators."
  • Prescription drug pricing affecting federal health programs, such as Medicaid, Medicare, and the Public Health Service "340B" program.

(The Committee's schedule may be viewed at http://oversight.house.gov/schedule.asp.)

Rep. Waxman has also recently led the following oversight activities directly affecting contractors:

  • Request that a contractor's previous Managing Director for Business Operations (i) produce contract and subcontract documents, invoices and billing records, and (ii) personally appear before the Committee for an interview.
  • Investigate GSA business dealings with contractors and request that GSA Administrator Lurita Doan provide the Committee with documents and communications regarding five named contractors.
  • Request that General Benjamin Griffin, Commander of the U.S. Army Materiel Command, address contractor-related problems that the GAO identified, including that "DoD continues to not have adequate contractor oversight personnel at deployed locations, precluding its ability to obtain reasonable assurance that contractors are meeting contract requirements efficiently and effectively at each location where work is being performed." See GAO Report, "High-Level DoD Action Needed to Address Long-standing Problems with Management and Oversight of Contractors Supporting Deployed Forces" (Dec. 18, 2006)(GAO-07-145).

The Executive Branch Reform Act of 2007 (H.R. 984)

Described by Rep. Waxman as perhaps "the most significant open-government legislation since the enactment of the Freedom of Information Act," the Executive Branch Reform Act seeks to increase transparency in the executive branch.

Key provisions of the Act require:

  • Additional restrictions on the relationships between contractors and government officials, as well as between lobbyists and government officials, to help "close the revolving door" by:
    • Barring executives who worked for contractors from awarding contracts to their previous employers once they enter the Government;
    • Imposing restrictions governing when government procurement officials may be hired by contractors to which the officials awarded contracts;
    • Prohibiting lobbyists who enter the Government from giving favors to former clients;
    • Prohibiting government officials from negotiating future employment with private interests who are affected by their official actions; and
    • Creating a two-year ban (rather than the current one-year ban) to prohibit previous government officials from lobbying their former colleagues.
  • More public disclosure of information by eliminating the use of "pseudo-classifications" for documents, such as "sensitive but not classified" or "for official use only."
  • Senior government officials to report contacts they have with lobbyists or other individuals who are trying to influence government action. Quarterly reports, which must identify dates of meetings, participants, and subject matters discussed, would be maintained in a searchable database at the Office of Government Ethics.

The Whistleblower Protection Enhancement Act of 2007 (H.R. 985)

The Whistleblower Protection Enhancement Act increases protections afforded to employees when they report waste, fraud, and abuse of taxpayer dollars by:

  • Remedying perceived deficiencies to strengthen the protections afforded to whistleblowers who are employees of government contractors and science-based agencies.
  • Expanding the class of employees afforded protection to federal workers who specialize in national security issues.
  • Responding to Federal Circuit decisions by increasing the scope of disclosures protected, lowering the standard of evidence that may be used to rebut the presumption that federal officials performed duties in accordance with the law, and allowing access to federal district courts when the Merit Systems Protection Board (MSPB) does not act within 180 days.

(Even while in the minority in the House of Representatives, Democrats have been active in proposing oversight and reform through the "Clean Contracting Act," the "Hurricane Katrina Accountability and Contracting Reform Act," the "Restore Open Government Act of 2005" and the "Federal Employee Protection of Disclosures Act," as well as by conducting investigations and issuing public statements regarding mismanagement of government contracts, especially those related to Homeland Security, Hurricane Katrina Recovery and Iraq Reconstruction. These initiatives will most likely be revisited in the 110th Congress. See Federal Procurement Reform Agenda in the Democratic House, November 8, 2006, located at www.wileyrein.com/publication.cfm?publication_id=12836.)

Through its previous, current, and anticipated initiatives, the Committee has scrutinized—and will continue to scrutinize—federal agencies' and contractors' activities in federal procurement. The government contracting community should expect the Committee to (i) convene additional oversight hearings, (ii) conduct probative investigations requesting contract-related information, and (iii) propose reform legislation to enhance transparency in government and otherwise improve perceived deficiencies in the current procurement laws.

Accountability in Government Contracting Act of 2007 (S. 680)

On the Senate side, on February 17, 2007, Senator Susan Collins (R-ME) along with Senators Thomas Carper (D-DE), Norm Coleman (R-MN), Claire McCaskill (D-MO) and Joseph Lieberman (D-CT), introduced the "Accountability in Government Contracting Act of 2007" (S. 680), which, according to the Senator, "would provide increased oversight and transparency in the federal government's dealings with contractors, strengthen the procurement workforce, reform the Inspector General community and combat waste, fraud, and abuse." Among its many reforms, S. 680 would:

  • Require competition of all government task or delivery orders over $100,000;
  • Mandate post-award debriefings and allow protests for task or delivery orders over $5 million;
  • Increase the amount of information required in a statement of work for task and delivery orders over $5 million;
  • Prohibit single awards of indefinite-delivery/indefinite quantity-contracts for services over $100 million;
  • Clarify that the subpoena power of an Inspector General (IG) extends to electronic documents;
  • Allow designated federal entity IGs to investigate and report false claims and to recoup losses from fraud that do not exceed $150,000; and
  • Require the publication of all sole-source task or delivery orders above $100,000 within 10 business days of the award.