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Counternarcotics contracts lack oversight

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Poor oversight of federal counternarcotics contracts calls to question how billions of tax dollars were spent, a congressional report shows.

Neither the State or Defense departments, which award most counternarcotics contracts, have adequate systems to track and evaluate contract data, the June 7 report states.

The report was prepared for Sen. Claire McCaskill, chairwoman of the Senate subcommittee on contracting oversight, after a May 2010 hearing revealed neither the State nor Defense departments could provide information about the contracts awarded for fighting drug production in eight countries south of the U.S. border.

“Without adequate oversight and management we are wasting tax dollars and throwing money at a problem without even knowing what we’re getting in return,” McCaskill said in a news release. “As we increase our counternarcotics contracting in Afghanistan, we can’t make these same mistakes again.”
The lack of oversight has led to inadequate competition, poor recordkeeping, and deficient transparency, the report states.

Annual spending on counternarcotics contracts in Latin America rose 32 percent over the five years reviewed in the report, from $482 million in 2005 to $636 million in 2009.

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Curbing Contractor Conflicts

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Contractor employees supporting acquisition offices may soon be required to disclose their financial investments, personal relationships and other involvements that could constitute a “personal conflict of interest.”

The proposed rule, which was published in the Federal Register Friday, would only apply to contractor employees who support or advise the government in planning acquisitions, determining supplies and services to purchase, developing and approving contract documents, evaluating contract proposals, awarding contracts, administering contracts, terminating contracts and determining if costs are fair and reasonable.

Contractors must obtain assurances from employees in these roles that they don’t have financial interests that would bias their acquisition support duties. Some examples of personal conflicts of interest include:

  • Having financial investments, such as stocks and bonds, in companies that do business with the office the contractor is supporting.
  • Having family members employed by companies that do business with the office the contractor is supporting.
  • Seeking employment opportunities with or holding a second job with a company that does business with the office the contractor is supporting.

The new rule would affect 250,000 contractor employees at 10,000 firms. It would also apply to subcontracts worth more than $100,000. Comments on the proposal will be accepted until Jan. 12.

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OMB procurement guidance now available

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UPDATE: OMB says the definition of inherently governmental functions is still being worked on. Expect to hear something by the end of the year.


The Office of Management and Budget just released two long-awaited procurement reform memos. The first is about increasing competition while reducing risk in contracting. The second is about strategic planning for the civilian agency acquisition workforce.

So far no word on a A third piece of expected guidance meant to clarify the definition of inherently governmental functions was not released today as expected [see update above]. That memo will help agencies carry out earlier guidance to insource certain contractor-performed work.

A full story on the new guidance will be posted on FederalTimes.com later today.

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Agencies cannot SPOT combat contractors

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Agencies are still having trouble spotting contractors on the battlefield, the Government Accountability Office reported today. That’s because they aren’t consistently using the new SPOT (Synchronized Redeployment and Operational Tracker) system designed to track information about contracts and contractor employees in Iraq and Afghanistan, GAO found in a new report.

Congress established the system in 2008 to help the Agency for International Development, the State Department and the Defense Department monitor and share information on contracts and contractor personnel in the combat zone.  The information meant to be collected includes the number of contract personnel on the battlefield, the number of contractor employees killed or wounded, and the value and purpose of a contract.

However, each agency established different criteria for who must be registered. As a result, some required contractor personnel information isn’t in the system, GAO found. Because data varies on the nearly 226,500 contractor employees that are registered in the system, SPOT “data should not be used to identify trends or draw conclusions about contractor personnel numbers,” GAO said.

In addition, SPOT can’t track all the required contract information. For example, a memorandum between the agencies said contract values, competition information and descriptions of services must be pulled into SPOT from the Federal Procurement Data System-Next Generation (FPDS-NG). But GAO found:

This capability is not expected to be available until 2010. In the interim, the DOD officials overseeing SPOT’s development told us that SPOT users can manually enter competition information and descriptions, but there is no requirement for them to do so. Since SPOT is not designed to let users enter contract dollar values, the DOD officials stated that SPOT and FPDS-NG are being periodically merged to identify contract values. Even when the direct link is established, pulling FPDS-NG data into SPOT may present challenges because of how data are entered into SPOT.

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