[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
FEDERAL CONTRACTING: DO POOR PERFORMERS KEEP WINNING?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
ORGANIZATION, AND PROCUREMENT
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JULY 18, 2007
__________
Serial No. 110-105
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.oversight.house.gov
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
HENRY A. WAXMAN, California, Chairman
TOM LANTOS, California TOM DAVIS, Virginia
EDOLPHUS TOWNS, New York DAN BURTON, Indiana
PAUL E. KANJORSKI, Pennsylvania CHRISTOPHER SHAYS, Connecticut
CAROLYN B. MALONEY, New York JOHN M. McHUGH, New York
ELIJAH E. CUMMINGS, Maryland JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio MARK E. SOUDER, Indiana
DANNY K. DAVIS, Illinois TODD RUSSELL PLATTS, Pennsylvania
JOHN F. TIERNEY, Massachusetts CHRIS CANNON, Utah
WM. LACY CLAY, Missouri JOHN J. DUNCAN, Jr., Tennessee
DIANE E. WATSON, California MICHAEL R. TURNER, Ohio
STEPHEN F. LYNCH, Massachusetts DARRELL E. ISSA, California
BRIAN HIGGINS, New York KENNY MARCHANT, Texas
JOHN A. YARMUTH, Kentucky LYNN A. WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa PATRICK T. McHENRY, North Carolina
ELEANOR HOLMES NORTON, District of VIRGINIA FOXX, North Carolina
Columbia BRIAN P. BILBRAY, California
BETTY McCOLLUM, Minnesota BILL SALI, Idaho
JIM COOPER, Tennessee JIM JORDAN, Ohio
CHRIS VAN HOLLEN, Maryland
PAUL W. HODES, New Hampshire
CHRISTOPHER S. MURPHY, Connecticut
JOHN P. SARBANES, Maryland
PETER WELCH, Vermont
Phil Schiliro, Chief of Staff
Phil Barnett, Staff Director
Earley Green, Chief Clerk
David Marin, Minority Staff Director
Subcommittee on Government Management, Organization, and Procurement
EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania BRIAN P. BILBRAY, California
CHRISTOPHER S. MURPHY, Connecticut TODD RUSSELL PLATTS, Pennsylvania,
PETER WELCH, Vermont JOHN J. DUNCAN, Jr., Tennessee
CAROLYN B. MALONEY, New York
Michael McCarthy, Staff Director
C O N T E N T S
----------
Page
Hearing held on July 18, 2007.................................... 1
Statement of:
Smith, Robin, former Wackenhut security officer at DHS
Headquarters; Lawrence Brede, senior vice president,
Wackenhut Services, Inc.; and Scott Amey, general counsel,
Project on Government Oversight............................ 96
Amey, Scott.............................................. 133
Brede, Lawrence.......................................... 105
Smith, Robin............................................. 96
Woods, William, Director, Acquisition and Sourcing
Management, Government Accountability Office; Elaine Duke,
Chief Procurement Officer, Department of Homeland Security;
Richard Skinner, Inspector General, Department of Homeland
Security; William Desmond, Associate Administrator,
accompanied by Tyler Przybylek, Senior Adviser to the
Administration, National Nuclear Security Administration,
Department of Energy; and Gregory Friedman, Inspector
General, Department of Energy.............................. 10
Desmond, William......................................... 64
Duke, Elaine............................................. 23
Friedman, Gregory........................................ 74
Skinner, Richard......................................... 34
Woods, William........................................... 10
Letters, statements, etc., submitted for the record by:
Amey, Scott, general counsel, Project on Government
Oversight, prepared statement of........................... 136
Brede, Lawrence, senior vice president, Wackenhut Services,
Inc., prepared statement of................................ 107
Desmond, William, Associate Administrator, National Nuclear
Security Administration, Department of Energy, prepared
statement of............................................... 66
Duke, Elaine, Chief Procurement Officer, Department of
Homeland Security, prepared statement of................... 25
Friedman, Gregory, Inspector General, Department of Energy,
prepared statement of...................................... 76
Skinner, Richard, Inspector General, Department of Homeland
Security, prepared statement of............................ 36
Smith, Robin, former Wackenhut security officer at DHS
Headquarters, prepared statement of........................ 99
Towns, Hon. Edolphus, a Representative in Congress from the
State of New York, prepared statement of................... 4
Woods, William, Director, Acquisition and Sourcing
Management, Government Accountability Office, prepared
statement of............................................... 13
FEDERAL CONTRACTING: DO POOR PERFORMERS KEEP WINNING?
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WEDNESDAY, JULY 18, 2007
House of Representatives,
Subcommittee on Government Management,
Organization, and Procurement,
Committee on Oversight and Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:10 p.m., in
room 2154, Rayburn House Office Building, Hon. Edolphus Towns
(chairman of the subcommittee) presiding.
Present: Representatives Towns, Murphy, Welch, Maloney,
Bilbray, and Platts.
Staff present: Michael McCarthy, staff director; Rick
Blake, professional staff member; Cecelia Morton, clerk; John
Brosnan, minority senior procurement counsel; Emile Monette,
minority professional staff member; Brian McNicoll, minority
communications director; and Benjamin Chance, minority clerk.
Mr. Towns. The hearing shall come to order.
We are here today to consider an important question: Is
there any penalty for poor performance as a Federal contractor?
This committee's investigation has gathered evidence of
serious, well-documented performance problems with large
Federal contracts. But these problems never seem to prevent the
companies involved from getting new work.
I remember the old saying, ``Fool me once, shame on you;
fool me twice, shame on me.'' Well, in my view, the taxpayers
are being fooled time and time again. This must stop.
I hear from my constituents and from small minority-owned
businesses nationwide that they can't get contracts with the
government, only subcontracts from these enormous firms that
get all the prime contracts. I am very concerned that when the
government does not expect existing contractors to meet high
standards, innovative new companies are effectively frozen out.
We could really shake up Federal contracting if we could
cut out the middleman and give some new people a shot. And it
would be an incentive for everyone to step up their performance
if they knew that doing a lousy job would mean the next
contract went to someone new.
For this hearing we have put together some case studies to
look at how the system for measuring past performance works or
does not work, as the case may be. I want to focus on the
policy behind managing for performance. How is the contractor's
performance measured? How is it weighed in the selection
process? Do our contracting officers have the tools they need?
Does it matter when contractors don't pay their taxes, violate
labor laws or face court judgments for fraud or discrimination?
These are the types of questions we should consider today.
Our first case study is Wackenhut. Wackenhut has provided
security for the Department of Energy at the Oak Ridge nuclear
site since 2004. The Department of Energy inspector general
reported that Wackenhut tipped off guards to a security drill,
making the drill useless, required personnel to work overtime
in excess of safety guidelines, and falsified records of
security guard training. The IG found that Oak Ridge security
cost nearly double during the Wackenhut 5-year term, and that
the company may have unduly profited. But Energy officials are
pleased with Wackenhut's performance, they have awarded ratings
of 98 and 99 percent, granted millions in award fees and
renewed the Wackenhut contract.
Wackenhut also provided security at DHS headquarters; we
have a former Wackenhut guard who will tell us about security
breaches and mismanagement in that contract. In fact, DHS has
decided not to employ Wackenhut at DHS headquarters anymore.
But just a few months after that decision, the Border Patrol
within DHS hired Wackenhut for a 5-year, $250 million contract
to transport immigration detainees in the Southwest.
Our second study is Bechtel, one of the largest contractors
in the world. At the Department of Energy, Bechtel holds a
massive construction contract for nuclear waste storage at the
Hanford site in Washington. Under Bechtel's management the
project's estimated cost has increased more than 150 percent to
about $11 billion, and the completion date has been extended
from 2011 to 2017. GAO attributed most of the cost increase and
delays to Bechtel's poor performance.
The Department of Energy also experienced problems with
security and management at Los Alamos National Laboratory which
was managed by the University of California. The problems got
so bad that Energy decided to rebid the contract and look for
new management. They found new management, a joint venture
between Bechtel and the University of California.
After Katrina, Bechtel got an emergency no-bid contract to
install and maintain trailers. The cost of that contract
spiraled out of control and auditors found more than $55
million of incorrect charges. More than 6 months after the
emergency, DHS finally put the contract out for competitive
bids. After the competition, Bechtel received a new contract to
continue its trailer work.
Let me point out, I am not against contracting or
contractors. I am against weak management and shoddy work. I
know responsible contractors share my views. The flaws in the
system are just as frustrating for companies who do high-
quality work as they are for Congress and the taxpayers.
From a policy view, one problem seems to be that
contracting officers often don't have a clear view of company
track records when making procurement decisions. There is no
easy access to relevant information like audit reports, IT
reports, a court decision reviewing previous work.
My colleague from New York, Carolyn Maloney, has introduced
a bill to acquire a data base for this type of information, and
we should discuss that approach today.
At this time, I would like to yield to the ranking member
of the committee, Congressman Bilbray from California.
[The prepared statement of Hon. Edolphus Towns follows:]
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Mr. Bilbray. Thank you, Mr. Chairman, I thank you for
having this hearing.
Mr. Chairman, I have served in many different functions in
government. At 25, I was a city council member, at 27 I became
mayor; I served 10 years for a small little group of citizens
called the county of San Diego, 3 million, and had the
privilege of coming here and serving in Congress. In that time,
the one thing that has become obvious to me is that there are
different schools of thought about the best way to provide
services to the public.
Frankly, I was forced as a young mayor when we lost 40
percent of our city funding under Proposition 13 to eventually
eliminate the police department and contract out that service.
We did it because the in-house bureaucracy had become so loaded
and inefficient that we needed to add competition to the
process; the only way to do that was to bring in outside
agencies.
Today I am looking at the explanation of this hearing, and
I would like to remind everybody that poor performance, keep
getting the contracts, also applies to those of us who are in
government. But poor performance is not a monopoly resting on
private contractors. I will give you an example.
I am shocked this town and the media didn't jump more on
the horrendous performance of the RTC with the liquidation of
the billions and billions of dollars of public assets. If you
think they were very efficient, take a look at the huge profits
of the people who bought up those assets of the RTC during that
period and said those profits could have been resources of the
taxpayer.
So we see the savings and loan debacle, we look at the
private sector. I spent most of my career in the public sector
realizing it was those on this side of aisle who really ripped
off the taxpayers by mismanaging those assets.
The lack of performance is something I think we need to
look at. One of things that I have seen is that fair
competition is where contracting really gives the ability to
get effectiveness.
There are some people I have worked with here as a
government official; I saw great success in some of these
companies. I would only say, I see contracting as being an
essential part of the ability of the Federal Government to
provide cost-effective service to the American people.
This hearing today should not be a crucifixion of the
private sector; it should be a way of being able to improve a
system that is essential, because when I came here to
Washington and looked around and looked at situations like a
powerhouse owned by the government that is still burning coal
at the turn of the century, all I thought was, My God, there
has to be a better way than having the Federal Government try
to do it all in house.
Mr. Speaker, there is a reason why today, across this
country and around this world, we have private contractors
defending our Naval bases and securing our facilities and that
is because we cannot afford not to. So I hope that this hearing
is a way to be able to take a system that is essentially to the
protection of the American people and improve it and get the
most cost-effective way of providing services, because honestly
there is no way we can make that claim if we try to say we
abolished the participation of the private sector and try to do
it all in house.
I think the record will show we will not go back to the
1930's. We need to do it with a competitive system, and
hopefully this will correct misconceptions and find some
situations that we can improve as partners in this concept of
providing essential services to the American people.
I yield back at this time, Mr. Chairman.
Mr. Towns. Thank you very much, Mr. Bilbray.
Congressman Welch.
Mr. Welch. I have no opening statement.
Mr. Towns. Congressman Murphy.
Mr. Murphy. Thank you, Mr. Chairman. Just a brief remark to
say, I think what we discuss here today is not a crucifixion of
the private sector, not to create a justification to end
Federal contracting as we know it, but to ask a simple
question: When the Federal Government knows about
inefficiencies and lapses of judgment with a contractor doing
business with the Federal Government, what are our
responsibilities? If there is an indictment to be made today, I
think it lies with both the private and public sectors.
In the State of Connecticut we spent a great deal of time
in Southington remediating a situation with a contractor who
did some major work on schools that was millions upon millions
of dollars over budget, or was well beyond schedule; and came
to find out that this contractor had had a long history of
problems in other school districts, unbeknownst and undisclosed
to the small town of Southington.
This isn't that situation. This is a situation where we are
not talking about information undisclosed; we are talking about
public information that U.S. Government agencies have regarding
the inefficiencies and poor work performance of private
contractors.
The question to be asked today is not necessarily, to the
ranking member's point, whether or not we go with more or less
Federal contracting, but what do we do with the information?
The way we are doing it now is not working. I certainly think
that can lead to an appropriate conversation as to whether we
are doing far too much over the private sector, but today's
conversation is how we utilize taxpayer dollars when we have
already made the decision to send that money into private
hands.
I look forward to testimony of the witnesses before us.
Mr. Towns. Thank you very much, Congressman Murphy.
Congresswoman Maloney.
Mrs. Maloney. Thank you, Mr. Chairman, for calling this
hearing on a critically important issue. It is really Congress'
responsibility to ensure that the taxpayers' dollars are used
wisely and not wasted on contracts that will not be fulfilled
or be fulfilled up to standards.
I will say that the chairman and I grew up in the rough and
tumble of New York City politics where we have had our share of
contract scandals. I chaired the committee on contracts in New
York City and authored a bill called VINDEX. It basically says,
before a procurement officer lets a contract, they must go into
the centralized data base and check whether or not that
contractor has good credit, whether or not that contractor has
completed the work on time, whether or not that contractor has
cost overruns, whether or not that contractor has a record of
having completed work and done it well, or if they have a
record of debarments and fines and penalties and punishment.
And that VINDEX system allows procurement officers to make good
choices when they make a decision to spend taxpayers' dollars
for a service.
The bill that I introduced does exactly that, it is built
on the copy of the H.R. 3033, Contractors and Federal Spending
Accountability Act and it will really put teeth behind and
fortify the current Federal suspension and debarment system.
When we put this into context, the United States is the
largest purchaser of goods and services in the entire world,
spending more than $419 billion on procurement awards in 2006
alone and $440 billion on grants in 2005. Yet the Federal
Government's watchdogs, the Federal suspension and debarment
official, our procurement officers, currently lack the
information that they need to protect our taxpayers' dollars
and the interest of business and government in getting a
contract built and done on time in the right manner.
To what our bill does is that right now we have no
centralized, confidential, governmentwide method to study and
account for the performance of our contractors and to assist
the procurement officers in making informed choices on who can
get the job done right.
I do want to cite data from the Project on Government
Oversight on a report that they did in 1995 of the top 50
Federal contractors, based on the total contract dollars
received. Mine have a total of 12 resolved cases, totaling $161
million in penalties paid; so my question is, why in the world
are we giving contracts to people who are being penalized for
poor performance? Obviously our procurement officers do not
have access to this information, this bill would give them that
information.
Additionally, these 50 contractors paid approximately $12
billion in fines and penalties. I mean, so we really can do a
better job and this bill would help create a system that would
allow us to have a more open and transparent government so that
our procurement officers could make better decisions on wisely
investing taxpayers' dollars in--over $400 billion in private
contracts.
So I thank you for calling this hearing, I think that one
of the things we have to continue to work on is better
oversight, better decisions, better procedures to protect
taxpayers' dollars, and this hearing and this bill will do
that.
I yield back, thank you.
Mr. Towns. Thank you very much, Congresswoman Maloney.
Let me add, we invited Bechtel to this hearing and they
declined. I just want the record to indicate that, they
declined.
Will the witnesses please stand? We always swear in our
witnesses here.
[Witnesses sworn.]
Mr. Towns. Let the record reflect they all answered in the
affirmative.
You may be seated.
Let me introduce our witnesses at this time. William Woods
is the Director of Acquisition and Sourcing Management with the
Government Accountability Office, an agency he has served with
since 1981. He is responsible for GAO's reviews of Federal
agency contracting and is an expert in the field.
Welcome.
Mr. Woods. Thank you.
Mr. Towns. Elaine Duke is Chief Procurement Officer at the
Department of Homeland Security. Ms. Duke previously served as
Department of Homeland Security's Deputy Chief Procurement
Officer and as the Assistant Administrator for Acquisitions for
the Transportation Security Administration. She spent much of
her career in acquisition for the U.S. Navy.
Welcome.
Richard Skinner is the Inspector General at the Department
of Homeland Security. He was formerly the FEMA IG, and has
previously served with the Department of State, Department of
Commerce, the Arms Control Disarmament Agency and other Federal
agencies.
Welcome.
Mr. William Desmond is Associate Administrator for Defense
Nuclear Security at the National Nuclear Security
Administration in the Department of Energy. He is a career
executive who has held a number of senior management posts in
nuclear security. Mr. Desmond is accompanied by Mr. Przybylek;
is that correct?
Mr. Przybylek. Yes, it is.
Mr. Towns. I want you to know I have been struggling with
that.
He was Senior Adviser to the Administrator at NNSA.
Gregory Friedman is Inspector General at the Department of
Energy. He has served at the Department since 1982 and has
worked in the Federal auditing field since 1968.
Mr. Woods, why don't you proceed with your opening
statement and let me just say, we would like for you to speak
for 5 minutes at the most; and then, of course, we allow the
committee the opportunity to ask questions. And, of course,
thank you so much; we will begin with you, Mr. Woods.
STATEMENTS OF WILLIAM WOODS, DIRECTOR, ACQUISITION AND SOURCING
MANAGEMENT, GOVERNMENT ACCOUNTABILITY OFFICE; ELAINE DUKE,
CHIEF PROCUREMENT OFFICER, DEPARTMENT OF HOMELAND SECURITY;
RICHARD SKINNER, INSPECTOR GENERAL, DEPARTMENT OF HOMELAND
SECURITY; WILLIAM DESMOND, ASSOCIATE ADMINISTRATOR, ACCOMPANIED
BY TYLER PRZYBYLEK, SENIOR ADVISER TO THE ADMINISTRATION,
NATIONAL NUCLEAR SECURITY ADMINISTRATION, DEPARTMENT OF ENERGY;
AND GREGORY FRIEDMAN, INSPECTOR GENERAL, DEPARTMENT OF ENERGY
STATEMENT OF WILLIAM WOODS
Mr. Woods. Thank you, Mr. Chairman, Mr. Bilbray, Mrs.
Maloney, Mr. Murphy. Good afternoon, it is a real pleasure to
be here, and I thank you for inviting me.
As Mrs. Maloney pointed out, the Federal Government is the
largest single buyer in the world, spending over $400 billion
annually on goods and services. Many of our agencies are highly
reliant these days on the use of contractors to carry out their
vital and important missions; and that makes it all the more
important and critical that we make sure that we award
contracts only to responsible contractors and that we have
systems in place to hold them accountable.
What I would like to do in a few minutes I have available
today is to run through some of the existing ways in which
contractor performance is considered in the award and
performance of government contracts.
Second, how that actually happens in practice, I will have
to point out that we are not involved in an in-depth evaluation
of the contractor performance, but we do know a little bit
about how that process is supposed to work; and I hope we can
provide that information to the committee this afternoon.
Third, we have a mechanism at GAO, a bid protest function
that allows us a particularly illuminating picture into how
past performance and other issues in the award of government
contracts actually happened on the ground; and I will
illustrate--my statement illustrates some cases where the use
of past performance has been an issue in some of those bid
protest decisions.
First--there are basically four ways in which a
contractor's performance might come into play, first, in the
area of source election. Now we as consumers in our ordinary
day-to-day lives would certainly agree that past performance is
important as we would pick contractors to perform services for
us, but surprisingly, it is not until relatively recently that
past performance became a required evaluation factor in
selecting government contractors.
It was in the mid-1990's that Congress enacted legislation,
largely shepherded by this committee, as well as others,
requiring that past performance be a critical and important
evaluation factor. The Federal Acquisition Regulation was
subsequently revised to require that past performance be an
evaluation factor in all government procurements.
The second way that contractor performance might come into
the play is in the area of responsibility. Now, once an agency
selects a contractor going through the evaluation process,
weighing the various evaluation factors and selecting a
contractor, it must then determine that selected contractor is
responsible; and that means that he has the business resources,
has the key personnel available, as well as the ethical
foundation in place, to be able to adequately carry out the
contract.
The third area is in the area of surveillance. The
government is responsible for the day-to-day monitoring of
contracting performance, and at the end of contracts is
responsible for completing a performance evaluation for all of
the contractors and making that available governmentwide,
entering it into a governmentwide data base.
And then fourth, where contractors fail to perform in a
very serious manner, there is a process, suspension and
debarment, and the Federal Acquisition Regulation specifically
says that a contractor who has a history of not performing up
to the requirements of a contract, that contractor may be
debarred from further contracts, and the debarment process can
last up to 3 years.
There are a number of guidance regulations, that is, policy
documents, etc., that are outlined in my statement--I won't get
into detail on those; some of those are governmentwide, the
Federal acquisition I mentioned. The Office of Federal
Procurement Policy within OMB also issued guidance on the use
of past performance in selecting contractors. There are also
specific guidance documents that individual agencies have; the
Department of Homeland Security, for example, Department of
Defense, Department of Energy all have their own guidance
documents that provide further elaboration on how past
performance ought to be considered.
Basically, there are a number of key points that must be
considered as contractor performance is factored into the
source selection process. First of all, agencies have very
broad discretion in how they are going to weigh past
performance. As I said, it is a required evaluation factor, but
it is up to the agencies to decide how much weight that factor
is going to apply in individual procurements.
Mr. Towns. Can you summarize?
Mr. Woods. I certainly will.
The key to all of this is whatever the solicitation says as
to how past performance is going to weigh, the agency must
adhere to that evaluation scheme. They do not have the
discretion to depart from an announced evaluation scheme.
Thank you, sir.
Mr. Towns. Thank you very much.
[The prepared statement of Mr. Woods follows:]
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Mr. Towns. Ms. Duke.
STATEMENT OF ELAINE DUKE
Ms. Duke. Good afternoon, Chairman Towns, Ranking Member
Bilbray and members of the subcommittee. Thank you for the
opportunity to speak before you and meet with you this
afternoon. I am the Chief Procurement Officer for the
Department of Homeland Security and a career executive, with
most of my 23 years in public service in the procurement
profession.
Before addressing the responsibility determinations, I
would like to convey my top three priorities, which are
essential to enhancing DHS's ability to procure from
responsible contractors. Those priorities are first, to build
the DHS acquisition work force; second, to make good business
deals; and third, to perform effective contract administration.
As the Chief Procurement Officer, I provide oversight and
support to eight procurement offices within DHS. I provide the
acquisition infrastructure by instituting policies and
procedures that allow DHS contracting officers to operate in a
uniform and consistent manner.
Mr. Chairman, I know that you are very interested in
ensuring that DHS and its components procure goods and services
on behalf of the American taxpayer from responsible
contractors. I can assure you that we share your interest and
take seriously our obligation to award only to responsible
contractors.
In my written testimony, I outline in detail the processes
and systems we rely on to ensure that we do business with
contractors holding a good track record of performance. In
addition to following the processes described in the
regulations, we have developed further guidance within DHS to
ensure contracting professionals make appropriate business
decisions based on the particular facts of each given
situation.
Our Homeland Security acquisition regulations and Homeland
Security acquisition manual supplement the Federal guidance and
reiterate the requirement that our contracting officers are to
perform responsibility determinations prior to making a new
contract award. Thus, if a contracting officer finds that a
company has a record that includes negative information, he or
she must assess its relevance in the requirement before award.
The role past performance plays in DHS-negotiated best-
values procurements is receiving increased attention. Just last
month my office issued an extensive, practical guide to source
selection to all components. The guide stresses the requirement
for evaluating past performance on all negotiated competitive
acquisition above the simplified acquisition threshold.
At the Department we are increasingly emphasizing
comparative adherence to the processes and the mechanics of
contracting processes. Very recently, the Under Secretary for
Management issued a memorandum to all members of the DHS
acquisition community, reinforcing the requirement to perform
performance evaluations on all of our contractors.
In response to the central question of this hearing, why do
poor performers keep winning, we are making concerted efforts
to improve contractor accountability and minimize those
instances where a poor performer receives a DHS contract award.
This fiscal year our eight components have executed over
59,000 contract actions representing total obligated dollars
over $6.5 billion, involving 12,000 different vendors. In
compliance with the FAR, contracting professionals are
consulted and we participate in the Interagency Suspension and
Debarment Committee.
I will address two specific businesses, Wackenhut and
Bechtel. In April 2006, DHS awarded a contract for guard
services for our Nebraska Avenue complex to Paragon Systems
incorporating lessons learned from DOD and more stringent
requirements. The predecessor Wackenhut contract was a legacy,
made, awarded and based on a operations contract vehicle for
significantly less robust security requirements. That contract
was with armed Navy active duty personnel.
The Wackenhut contract awarded Customs and Border
Protection to transfer immigration detainees to consider past
performance as a key evaluation factor as part of the source
selection process. Positive feedback from two Federal agencies
was received by Customs and Border Protection, and thus far
performance has been satisfactory.
The Wackenhut contract awarded by Immigration and Custom
Enforcement [ICE], for guard services were awarded as task
orders of the General Services Administration schedule. GSA
makes the required responsibility determinations and monitors
contract performance on key aspects of contractor compliance
through the life of the contract.
With regard to Bechtel, the past performance questionnaires
were sent to the company and individuals, returned in sealed
envelopes, and past performance was considered in the
competition of the Individual Assistance-Technical Assistance
Contract at FEMA.
We continue to grow and train our work force in DHS and
look forward to answering questions this afternoon.
Mr. Towns. Thanks you very, very much, Ms. Duke.
[The prepared statement of Ms. Duke follows:]
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Mr. Towns. Mr. Skinner.
STATEMENT OF RICHARD SKINNER
Mr. Skinner. Good afternoon, Chairman Towns, Ranking Member
Bilbray and members of the subcommittee. It is a pleasure to be
here.
There are several points I would like to make. The first
deals with acquisition resources. It should not be a surprise
to anyone there is acquisition management crisis within the
Federal Government today, the problem is not a new one.
For the past decade, management capabilities have been
downsizing while procurement workload was on the rise.
Procurement spending in the Federal Government has more than
doubled just in the past 6 years alone from $203 billion to
$412 billion.
I also think it is important to note that when the
Department of Homeland Security was created, it was
shortchanged. On one side of the ledger, it required the entire
assets and programs of 22 disgruntled agencies. Yet on the
other side of the ledger, it did not require proportionate
share of the acquisition management assets needed to support
those programs and operations.
DHS contract spending has tripled over the past 3 years
from $3.4 billion to $15.8 billion. DHS is now one of the
largest user of contractors in the Federal Government after the
DOD and Energy; yet while its contract spending has grown
significantly, its ability to manage those contracts has been
unable to keep pace.
My second point goes to expediency over substance, schedule
concerns trump performance concerns. Like many other Federal
agencies, the Department of Homeland Security is in a catch 22
situation. The urgency of this mission demands rapid pursuit of
major investments programs. The contracts, however, limit the
time available for adequate procurement claims and development
of technical requirements, acceptance criteria and performance
measures.
Without the basic provisions that specify precisely the
expected outcomes and performance measures, the government has
no basis to assert that a contractor failed to perform and,
thus, no basis to pursue suspension and debarment or other
remedies to protect the taxpayer in future procurements. The
government must lay the groundwork from the very beginning of
the acquisition process, not after millions have been spent
with little or nothing to show for it.
My final point is the contracting vehicles being reported
today to ensure procurement of goods and services. The
Department of Homeland Security, like many Federal agencies,
has become increasingly reliant upon risky contract types that
can be easily abused unless properly managed. These contracting
vehicles, such as the performance based contract, indefinite
delivery, indefinite quantity, IDIQ contracts, and time and
material contracts should only be used in limited
circumstances, fully justified, and only when an agency
acquisition infrastructure is in place, to provide sufficient
oversight.
Before I close my statement, Mr. Chairman, I would like to
say a few words about contract performance information and the
ability of agencies to share access to such information.
For many years, the Federal Government has pursued data
bases that contain contractor performance information and
provide easy access to agencies planning to award new
contracts. In fact, several systems with varying levels of
functionality exist today. Nevertheless we do not have a single
system that includes all relevant information. For example,
consent decrees, negotiated settlements, reports of
investigation, audit reports, State government information are
not readily available in these systems.
The current task force is with our inspector general at
GSA. The Justice Department initiated this effort last fall and
focused the resources and talents of U.S. attorneys, inspector
generals and other parts of the government we're finding
procurement fraud.
Our legislative committee is looking at what statutory
changes would be needed to strengthen the tools to prevent and
remedy misconduct in Federal contracts. One proposal we are
exploring would address the issue of sharing contractor
performance information.
I understand, Congresswoman Maloney, that you have
introduced legislation just this past Friday, cosponsored with
Chairman Towns.
Mrs. Maloney. Yes.
Mr. Skinner. I applaud you for that and look forward to
working with you and exploring ways that we can improve
information sharing in the Federal Government on procurement
operations.
In summary, DHS and the Federal Government can do a better
job protecting public interest in major acquisitions. The long-
run solutions include strong, clearly articulated program
goals, defined program technical requirements, performance
measures and acceptance terms, well-structured contacts and
sole costs and performance oversight.
In the near term, DHS mitigates risk exposure through such
actions as writing shorter-term contracts with smaller
incremental tasks, using contract vehicles that better share
risk between government and the vendor and ensuring the
government has a negotiating bar with decision points and
options.
Mr. Chairman, this concludes my remarks. I will be happy to
answer any questions you or the committee may have.
Mr. Towns. Thank you very much, Mr. Skinner.
[The prepared statement of Mr. Skinner follows:]
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Mr. Towns. Mr. Desmond.
STATEMENT OF WILLIAM J. DESMOND
Mr. Desmond. Good afternoon, Mr. Chairman, Ranking Member
Bilbray and members of the subcommittee. I appreciate the
opportunity to appear before you today to discuss your concerns
with the performance of Department of Energy security
contractors.
Let me briefly begin by introducing myself and providing a
description of the roles and responsibilities of the Office of
Defense Nuclear Security within the National Nuclear Security
Administration. I have worked in various security positions
since July 1967, encompassing a wide range of activities,
including the implementation of security programs at nuclear
facilities, the formation of nuclear security policy and site
security program direction and management. These positions have
spanned the U.S. Department of Energy and the Nuclear
Regulatory Commission. I believe my experience affords me a
unique perspective on nuclear security.
As the Associate Administrator, I am responsible for the
overall direction and management of physical security programs
at these sites. I serve in the organization for providing
engineering, technical operational and administrative security
support and oversight to both headquarters line management and
field elements. This includes physical security, personnel
security, nuclear materials control, accounting, sensitive
information protection and technical security programs.
In carrying out my responsibilities, I work with the NNSA
site offices which, in turn, has many service security programs
at the laboratories and the plants. I have also been designated
as the Chief, Defense Nuclear Security, pursuant to section
3232 of the National Security Administration Act. As such I am
responsible for the implementation of security policies as
directed by the Secretary and the Administrator.
With respect to the recent selection of Wackenhut Services,
Inc., as the protective force contractor at the Oak Ridge
Reservation, I served as source selection official and made the
final decision to award the contract to WSI. This was after
reviewing the proposals and the evaluation report prepared by
the source evaluation board. I made the best-value decision in
selecting the winning proposal.
As part of the evaluation and selection process, they
carefully reviewed the materials submitted by each offeror for
a technical approach, business management approach and relevant
past experience. The SEB also evaluated responses to customer
feedback questionnaires, interviewed references contained
within the RFP submissions and reviewed independent reports as
a DOE Inspector General, and the Defense Contract Audit Agency.
We also evaluated the information available from the
governmentwide past performance information retrieval system
and the Excluded Parties List system. We paid particular
attention to four recent DOE IG reports providing security at
the Oak Ridge site. As with most criticisms, some of the
findings were precisely on target, some we disagreed with and
some seemed exaggerated.
In one report it was alleged that protective force
personnel cheated on force and force exercise. While NNSA
agreed that the scenario of information control procedures were
insufficient, we noted that the performance test was conducted
for training, not protection evaluation purposes; therefore,
the loss had no impact on Y-12 security. The Y-12 site office
took coordinated action with the operating contractor and WSI
management to improve the planning, coordination and execution
of performance tests to ensure the integrity of the results.
There have been no recurrence of this problem.
In another case, NNSA disagreed with the IG in its
conclusion that protective force personnel had been given
credit for training that they did not receive. However, NNSA
concurred with the findings and recommendations as a means to
improve the quality in the administration of the protective
force program. My written testimony, Mr. Chairman, provides
more details on these and other issues raised by the IG.
Based on the information we received in the evaluation and
selection process that was followed, this award was thorough,
fair and honest; the process followed departmental acquisition
guidelines.
As you have mentioned, I am accompanied by Mr. Thomas
Przybylek, the Senior Adviser to the NNSA Administrator and the
NNSA's former General Counsel. Mr. Przybylek served on the
Source Evaluation Board for the Los Alamos National Laboratory
management and operations contract, which was awarded in
December 2005, and was the source selection official for the
Livermore National Laboratory management and operations
contract, which was awarded this past May. He and I will be
pleased to answer your questions, Mr. Chairman.
Mr. Towns. Thank you very much, Mr. Desmond.
[The prepared statement of Mr. Desmond follows:]
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Mr. Towns. Mr. Friedman.
STATEMENT OF GREGORY H. FRIEDMAN
Mr. Friedman. Mr. Chairman, it is entirely up to you. Given
the size of the panel and the hour, I would be more than happy
to waive my short statement, whatever you prefer.
Mr. Towns. Go ahead and proceed.
Mr. Bilbray. You have been patient.
Mr. Friedman. I have done this before and am more than
happy to pass, if you would prefer.
Mr. Chairman, Mr. Bilbray and members of the subcommittee,
I am pleased to be here today, at your request, to testify on
issues pertaining to contract management of the Department of
Energy.
The Department is highly dependent on its contractor work
force. There are about 15,000 Federal employees at the
Department; in contrast, there are about 100,000 contract
employees plus a significant number of subcontract employees
who operate the Department's national laboratories, production
facilities and all environmental remediation projects.
The operations performed by contractors consume at least
three-quarters of the Department's project. As we have reported
annually, contract administration is one of the most pressing
management challenges facing the Department. This permeates
every aspect of the Department's programmatic and
administrative activities, including those of the National
Nuclear Security Administration. Our work is documented and the
Department administers its contracts.
Specifically, contract activities very often were not
conducted in an economic, efficient manner; and health and
security issues, which are extremely important in the
Department of Energy setting, were not always given the
attention they deserved. Most importantly, contractors were not
always held accountable for their actions.
The subcommittee expressed its interest in agency contracts
with Wackenhut Services, the Bechtel Corp., and the University
of California, three of the Department's most prominent
contractors. In my shortened testimony, I was planning to
discuss our findings with regard to three examples; I refer you
in my full testimony where those are described, and I will
proceed from there.
Each of these reports is different in terms of scope and
purpose, but they are representative of the Department's
continuing challenge to effectively manage a contract work
force.
As to those who have proceeded before me, there are a
number of changes in process in the Department of Energy, but
clearly the Department needs to do a better job in contract
administration. As we have testified previously, the Department
should first ensure that its contracts are structured properly
and that competition is maximized, establish realistic
expectations of desired outcomes and achievable contractor
metrics, effect monitor performance and hold individuals in
contractors accountable when expectations are not met.
With reference to accountability, contracting officials
need to be aggressive in redirecting work assignments, making
fee determination evaluations and making cost allowability
determinations, and when called for, pursuing contractor
suspensions and debarments.
Regarding suspensions and debarments, I would like to point
out, the Department of National Nuclear Security Administration
currently had 54 individuals and companies on their debarment,
or excluded parties, list; each one of these actions resulted
from the investigations and recommendations by the Office of
Inspector General. To fully achieve the goals of the agency,
the Department must place square emphasis on the deference to
adopt and maintain salary contract administration practices.
Furthermore, as the Department explores new governance
models, it is imperative fundamental oversight principles are
maintained as a means of ensuring accountability and protecting
against waste and mismanagement.
Mr. Chairman and the members of the committee, this
concludes my statement, and I would be pleased to answer any
questions you may have.
[The prepared statement of Mr. Friedman follows:]
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Mr. Towns. Thank you very much. Now we would like to ask a
few questions.
Mr. Desmond, I want to ask more about the Wackenhut
contract at Oak Ridge. I don't understand how Wackenhut can be
caught cheating on a drill and still receive--I heard your
statement, a 97 or 98 score on the final evaluation.
When I was in school, if you were caught cheating on a
test, your score was zero. You either flunked--in some
instances, they would put you out.
It seems that a seventh grader is actually held to a higher
standard than the nuclear security contractors. Could I get
your answer? I heard you say--but I want to hear more about
this, yes.
Mr. Desmond. Mr. Chairman, there are a variety of tools in
the toolkit that we use to assess the performance of our
contractors. They range from full-scale exercises, red team
against blue team, down to security surveys done by our--self-
assessments done by contractors.
In the present exercise, which occurred in June 2004, a
test was established to evaluate the adequacy of the strategy
that was used to implement a brand-new design basis threat
policy of the Department of Energy. It was not used to evaluate
the performance of the contractor because the policy had just
been instituted and was not fully required for implementation
for several years. So this was determined a diagnostic test; in
fact, it was a training exercise.
In this exercise there was a security system called JCATs,
Joint Combat Assessment Tool, where blue and red teams will
gain security strategy. Two of the supervisors of the
protective force had access to the scenario the day before. And
while it was not permitted, our procedures had been changed to
prevent that from recurring in the future. This was not an
organized activity by the part of the company, but initiative
by two of the individual supervisors.
Nevertheless, the Department of Energy, NNSA, Wackenhut,
took this as a very serious event, and have changed our
procedures. And Wackenhut was, in fact, penalized during that
award period for this activity, for not having better controls
in place. So, hence, I say it had no impact, sir, on the
security of Y-12, but it did impact the diagnostic evaluation
at that particular time.
Mr. Towns. Can you give me an example of a security
contract in DOE where the contractor got low scores?
Mr. Desmond. No scores?
Mr. Towns. Low scores, l-o-w.
Mr. Desmond. Within the National Nuclear Security
Administration we have a variety of models of security
contracting, from direct contracts to the government to
proprietary contracts----
Mr. Towns. What led to the low scores?
Mr. Desmond. When there are instances of low scores, it
would be based upon performance, inadequate or performance that
did not meet our expectations. There have been examples, Mr.
Chairman, at Nevada in a particular test in December--excuse
me, August 2004--in which the contractor was given a very low
score for that reporting period. We have only two contractors
who are separately evaluated for security purposes and those
are the security contracts at Y-12 and at Nevada.
Mr. Towns. OK.
Let me ask--I guess this is to all of you--are contracting
officers really the most objective people to be grading
performance? Don't they have a stake in the success of the
contract?
Let me go down the row here very quickly.
Mr. Woods. Well, certainly when we enter into a contract,
we want the contract to be successful certainly. But the
contracting officer is not the customer of the required goods
or services; in many cases, he is acting on behalf of a program
official, for example, to acquire goods or services from the
private sector. So--he is not directly impacted by the quality
of the goods and services, so he may be in a better position to
provide that kind of evaluation.
Mr. Towns. Well, if you lose a contract they won't have
anything to evaluate, that is--I mean, doesn't that play into
it? For instance, if for any reason they lose a contract and
the person that is responsible for it, you know, isn't that a
reflection?
Mr. Woods. As I said all, parties want the contract to be
successful--the contractor, the contracting officer and the end
user of the goods and services, they all want the contract to
be successful. But they all have an interest in ensuring that
the performance is what it needs to be, particularly the end
user; and we've seen a number of instances where that end user
has not been reluctant to provide low scores to contractors
that don't perform as required.
Mr. Towns. Let me run just down the line, and ask about
procurement.
Ms. Duke. Sure.
I agree with Mr. Woods: The person that owns the budget,
owns the mission, is the program office, the customer. They are
in the best position to valuate the contractor's performance.
They are the ones responsible for delivering performance by in-
house personnel or contractor, and the contracting officer
provides the business partnership to that program office.
In DHS, we require the COTRs and contracting officers, the
technical representatives, to evaluate performance so that,
from the technical side, they are talking about the technical
issues of performance; from the contracting officer's side, we
evaluate their business abilities, whether they are performing
in the right business fashion.
So I think both are important.
Mr. Przybylek. Mr. Chairman, the way we do it in the
National Nuclear Security Administration is that each program
that has funding at a particular facility and a statement of
work has a contracting officer representative. That person, at
the end of the year, is responsible for providing to our
contracting folks an evaluation of the performance of that
specific piece of work. So it is very much the way Ms. Duke
described it.
The contracting officers then roll out the overall
evaluation of that contractor's performance, and at the end of
the year our administrator looks across all eight of our
facilities to make sure we consistently evaluate the
performance of the contractor, so that we are neither too
severe nor too lax in terms of evaluating the performance, and
then he ultimately sets the amount of fee that they earn for
the year.
Mr. Towns. Mr. Friedman.
Mr. Friedman. Mr. Towns, I think you hit upon it and you
have it right. It is a partnership, and it has to be on a
wholistic approach. It needs the program officials, as well as
the procurement officials, to make those kinds of evaluations
intelligently. And there have to be metrics in place, because
you evaluate the contract and they have to be quantifiable and
outcome oriented. So I agree with your point.
Mr. Towns. Any other comments?
Mr. Skinner. I agree with Ms. Duke and Mr. Woods and others
on this panel.
The CO is in a good position to put together an evaluation
of the contractor's performance, but we have to ensure that
there are, in fact, performance measures, metrics in place so
there is consistency when we do those evaluations.
Also, I think there has to be discipline. A lot of our
contracting officers are spread very, very thinly, and
therefore they cannot always go out to do outreach, to ensure
those performance measures, performance reports are, in fact,
obtained and input into any systems that we may have. We need
discipline, we need metrics.
The final thing, I think, that concerns me most is, we are
not always reaching out to other parties that have input. For
example, audit reports are now oftentimes overlooked when they
do the performance evaluation, reports of investigation,
whether they turn anything up, criminal or not, nonetheless
should be taken into consideration. But there are no avenues or
means to do this at this point in time, and that is one of the
concerns we have.
Mr. Towns. Also you indicated that there were 3 billion,
and now up to 15 billion, and the staff has been decreased to
be responsible for the monitoring of it. That, to me, is very
disturbing.
Mr. Skinner. I didn't want to discuss that the staff has
been decreased. As a matter of fact, the Department of Homeland
Security and Ms. Duke recognize the situation that we are in
here, that our procurement activity is increasing faster than
our ability to hire staff to manage these contracts. It is not
an easy task to bring in and train the program managers and the
COTRs and project managers and other experts necessary to
provide oversight to these complex, large contracts that--the
projects that the Department has ongoing. We have a long way to
go before we can reach a level of assurance that we have the
resources needed to manage these contracts.
Mr. Towns. Thank you very much.
I yield to the ranking member, Mr. Bilbray.
Mr. Bilbray. Thank you.
Mr. Skinner, in a small way, it reminds me of what happened
with the Roosevelt administration in the late 1930's- early
1940's, when there was no way the bureaucracy was ever on line
to be able to do that contracting. Would that be a fair
comparison?
Mr. Skinner. Yes.
Mr. Bilbray. Mr. Woods, I have to agree with the chairman,
I think we hear a lot of hoopla about private contractor
accountability, but it does come into the system--the in-house
employees' accountability, bureaucracy--inherently the Civil
Service system insulates bureaucracy so often that when we were
talking about the concept of having the outcome reflect on the
future employment or future engagement of private contractors,
some say maybe the outcome doesn't affect the bureaucracy and
their future employment, future engagement.
Is there a way we can sort of put the heat on those who are
actually administering these contracts, so they have a
personal, vested interest in success and a dread of failure
here, along with the taxpayers?
Mr. Woods. Of the things that can be done, No. 1, Mr.
Skinner mentioned the number of personnel that we have assigned
to this area. I couldn't agree more that we need more folks
that are involved in the administration of contracts. No. 1,
that is a challenge across the Federal Government.
The other response that I would have is, we looked in-depth
at the Department of Defense, at their ability to monitor
contracts and the mechanism, the bureaucracy, that they had in
place to do that. Ms. Duke mentioned the contracting officer's
technical representatives; those are really the frontline
people that are responsible for monitoring contractor
performance.
We found a number of deficiencies at the Department of
Defense in that regard. They were not properly trained. There
were not enough of those people, they were not properly
motivated, and they did not have--as you were alluding to--the
right incentives to do their job. For many of them, it was
other duties assigned; it was not their primary responsibility,
and frankly, it became a secondary consideration for them.
So I think there are actions that can be taken across the
board in that regard.
Mr. Bilbray. We run across these problems, and it is
inherent, basically, with the public service system that there
is job protection. We don't want to go to the score system, but
the flip side is, that insulation may create the feeling that I
really don't--my job is invested with the outcome--just as long
as the process looks good and I keep my supervisor happy one
way or the other. I guess what we need to look at here is how
to turn the heat up on this.
Mr. Skinner, one of the things you were saying about the
exchange of information, a lot of this I looked at as fire
walls, basically information fire walls. A lot of these were
created after Watergate with a lot of information about
agencies not sharing information, individuals not sharing
information; and when you say it is time to put that behind us
and start sharing information more and more in the Federal
Government, rather than always being paranoid worrying about
Big Brother knowing too much about us----
Mr. Skinner. I don't think the worry is so much fire walls.
We do have systems to provide information on contractor
performance. We looked at some of those systems as we prepared
to do our reviews as DHS contract management. We are finding
that there are gross inconsistencies on how people put
information into these systems. It doesn't appear that there is
any discipline or standards on what needs to be put in, what
format should be put in.
As we looked at several of the contractors that we knew had
historic problems, we found nothing in these systems there
across the government saying anyone ever had a problem with
these contractors; and we know, in fact, there were problems.
So there is not so much the fire wall as it is the discipline;
it is the standards, the guidelines to ensure that certain
basic information, in fact, is input into the system.
Mr. Bilbray. It is not exclusive to this operation. Lateral
transfer has been the greatest scam, for one government agency
to shift problems over to somebody else, Yeah, he was a great
guy; go ahead and take him.
The Wackenhut test supposedly--let's face it, we make
statements up here, our staff gives us these statements,
everybody is cheating, whatever, when you are doing this
exercise. As the head of the Public Protection Agency for San
Diego County, we did exercises. We said, we are going in
because a cruise ship has sunk and everybody has to respond.
They knew the test was coming. Rather than someone
screaming that it was cheating, cheating, it sounds to me more
like what every teacher in America is doing now, that is,
teaching to the test.
Was that a situation where you use a testing process as
part of the learning process and actually throw the test out
there, because, I mean, cheating is pretty hard work?
Mr. Desmond. The test was a training exercise. There was
not a conscious attempt to train to the test, but in fact, that
is what happened, sir, yes.
Mr. Bilbray. So if we want to be outraged at Wackenhut,
maybe we ought to be outraged at the national education system
that is basically doing the same thing with our children year
after year. I just think it is fair. You can take these
situations, spin it a certain way and really put them out
there.
I don't think any reasonable person would say the American
educational institution is teaching our kids to cheat, though
some would love to say that, but I think that in all fairness
we ought to be balanced in the approach.
Thank you very much for my time, Mr. Chairman.
Mr. Murphy [presiding]. I would like to ask Mr. Friedman if
he has any comments on that last issue.
Mr. Friedman. First, it is my report that covered this
issue; you have very lofty goals for this hearing.
We got into this at the request of the Federal site manager
at Y-12. He was concerned because the actual results of this
test were far superior to the computer-generated, anticipated
results, and he could not make the--he could not understand--
there was a disconnect which he could not understand.
He initiated his own inquiry and found, in fact, there was
a compromise of the test, but he wanted a third party to look
at it; and as many Federal administrators do in terms of the
inspector general, we took on the responsibility and our
results speak for themselves. I think the report stands on its
own, and it is one that I stand behind. We did not use the word
``cheating'' in the report, but the test was compromised.
Mr. Bilbray. So, in other words, you think they--would it
be fair to say, they were teaching to the test in this
exercise?
Mr. Friedman. I am not sure teaching to the test is the
right way to characterize it, Mr. Bilbray. But what I will tell
you is that the defender force was given information about the
offender force's strategy. When you have that information prior
to the test, obviously the test is compromised and the results
are questionable.
Mr. Murphy. Thank you.
Mrs. Maloney.
Mrs. Maloney. I want to thank all of the panelists for
their testimony, and I want to really followup on Mr. Skinner's
offer to look at the legislation and put your input in it. I
will send it to you and maybe we can make an appointment next
week to meet on it and see where it goes.
You were saying that we could put standards and format in
place, and I think we could do that, but how long do you think
it would take to fix this? You say it is not working. How many
systems are there out there? You say there is no centralized
system, but----
Mr. Skinner. There is no single system, and I can't say how
many systems are out there categorically--Elaine might know
that better than I.
The point I am making, there is no consistency as far as
what we are putting in there from our Departments--from DHS,
Department of Energy, DOD. It is all across the board.
Mrs. Maloney. It seems simple to come out with a list of
format and standards and have everyone follow them. There
should be some performance metrics in place.
If we could hear from you, what you think they should be--I
think it should be whether or not they have the history of the
company, whether or not they have financial standing, whether
or not they have gotten prior contracts, if they were completed
on time, whether there are cost overruns, are they listed with
the organized crime businesses--there are just a few.
What else would you put in as a metric?
Mr. Skinner. Those are exactly the types of things that we
had in mind as well, to deliver the product or service as a
contractor. Do we do it on time? Do we do it within budget?
These types of basic information in a standard format that is
consistent across the board.
Also using other input, the evaluations from OIGs or others
that--including GAO. If we can come up with an inventory of
things that need to go into this system, we can do it in a
standard fashion, I think it will help the contracting officer
when they query these systems.
Mrs. Maloney. It would remove really the intuition; you
would have specific indicators there.
I would like to ask all the panelists to submit to the
committee and to my colleagues what you think would be the
indicators that should be part of a centralized system. I think
that would be helpful.
Can anyone answer my original question: How many systems
are out there and why are they not working?
What gets me is, you always say--a lot of times we will
say, oh, we have a system, and it is OK; but repeatedly, you
see usually the same people get the contracts again and again,
and there are billions of dollars oftentimes in cost overruns
and waste on the previous work, and this is really an example
of a process that is not working.
So could you elaborate, Ms. Duke, on how many systems or
centralized data processing areas are out there now?
Ms. Duke. There are three primary systems we use to make
your responsibility determinant. One is Dun & Bradstreet, a
commercial system we use principally for financial
responsibility-type issues.
The second is the Excluded Parties List, administered by
the GSA, where we look to see if a party, an individual or
company has been suspended or disbarred. Past Performance
Retrieval System [PPIRS], that is where we store past
performance information. So as Federal agencies do past
performance evaluations, they are required to put it into the
PPIRS system.
There is no system for some of the things Mr. Skinner
talked about--IG reports, GAO reports, other indicators; I
would put those all in the administrative realm.
In terms of, if we cross into the legal realm--potential
indictments, cases going on, legal areas--I believe right now
there is consciously no system to either allow access or to
aggregate that information.
Mrs. Maloney. Are you required to access the three existing
systems now before making a decision as a procurement officer?
Ms. Duke. We are required to check PPIRS and the Excluded
Parties List. Dun & Bradstreet was discussed. It doesn't
mandate that you use Dun & Bradstreet, that's just the standard
practice.
Mrs. Maloney. Why are there so many mistakes? How do the
same people get contracts over and over again?
Why can't we break them down into smaller ones? Sometimes
they hand out huge contracts to manage an entire country. Why
are there so many scandals in our contracting process now?
Ms. Duke. I think when we look at the scandals in our
contracting process--Mr. Skinner in his opening statement
talked about setting the requirements up front.
The contracting officer has always talked about
procurement; procurement is the result of a process where the
government says what it wants, how it wants it and negotiates a
deal with industry. I think if you don't have that solid
foundation, then that is where the deals go awry.
It is not only selecting the right contractor, but it is
having the right requirements and having clarity of what you
want from that company, or not having clarity. And that is a
very big challenge, especially in Homeland Security as we have
the urgency of our mission; where a new mission arises, we have
to very quickly develop the program and go with a contract.
I think sometimes we are choosing to meet the mission and
choosing to consider that over some of the more deep processes,
and then we end up having to manage out of that or do some of
the partnership steps later in the process; where if we had
more time, I think we would set a more solid foundation.
It is just like someone renovating your home. You want a
real meeting of the minds between you and your contractor
before they bring a sledge hammer to your basement. And that is
really the key.
Mrs. Maloney. I am told by staff that there are actually
more than 50 existing data bases that can be used; is that
true?
Ms. Duke. I am not familiar what specific ones. There are
many data bases. The ones I listed are the three principal ones
for responsibility.
Mrs. Maloney. Could you look into how many data bases are
out there? I am sure my colleagues would like to see the list,
in addition to the three that you have given us.
My time has expired, thank you very much.
Mr. Murphy. Thank you, Mrs. Maloney.
Mr. Platts, we have votes coming up in 10 minutes, we will
try to finish this panel.
Mr. Platts.
Mr. Platts. Thank you, Mr. Chairman. I will try to be
quick. I would like to thank all of the witnesses here for your
participation in this hearing.
Mrs. Maloney has introduced legislation to try to
strengthen the information available. I know there are various
sources of information--past performance, an information
retrieval system that is easily accessed.
I want to focus, Ms. Duke and Mr. Przybylek, with your
direct involvement in procurement, on the other information
that is also out there and specifically deals with liens, tax
debt owed that is not automatically included in that retrieval
system.
How easy do you find it to become aware of that
information, and what do you and your staff seek out regarding
potential contractors?
Ms. Duke. Right now, there is a requirement in the
Representations and Certifications for Contractors to disclose
any criminal activity, as specified in the Federal Acquisition
Regulations, for a company in the specified period, and that
specifies what type of activity, convictions they have to
disclose.
There is also a Federal Acquisition Regulation case ongoing
that will require contractors to certify if they have similar
problems with the Internal Revenue Service in terms of taxes.
Other types of activity--criminal activity, current tax
issues--that is not information that contracting officers can
receive, unless it is available in the public. We have no more
rights to that information than the public in terms of
receiving that.
Mr. Przybylek. In addition to what Ms. Duke just described,
we looked at the Nuclear Regulatory Commission Data base on
notices of violation, our own departmental nuclear safety
rules, Price-Anderson data base.
We try to get information concerning environmental
noncompliances, and as I mentioned to staff, we actually use
common search engines to see if we can find any more
information to help us in making that judgment.
Mr. Platts. Is that a common practice at DHS as well,
proactively searching in open domain information of potential
contractors?
Ms. Duke. Not totally. It is more, principally--looking at
past performance references on other similar Federal and
commercial contracts would be the principal driver of the
decision.
Mr. Platts. On the information required under FAR to
disclose regarding criminal record activity or civil liability,
such as tax debt, are there instances that you have had
contractors not disclose that, that you later learned they had
a tax debt?
Ms. Duke. Yes, we can consider that. There is one caveat;
if we are going to use negative past performance information
gathered from other than the contractor as part of our
decisionmaking, we have to give the contractor an opportunity
to comment on that.
Mr. Platts. If they submitted a contract bid, not disclosed
a tax debt they should have, what action does the Department
take in response to that failure to disclose as required by
law?
Ms. Duke. That isn't in play yet. Once it is finalized,
that is certification, and we would consider that potential
fraud, and we would turn it over to the inspector general,
because any suspected fraud we immediately turn over to the
inspector general.
Mr. Platts. I am going to run out of time.
Mr. Skinner, how would you approach that? Would that be
grounds for pursuing debarment, that failure to disclose?
Mr. Skinner. I personally think it would be grounds for
debarment, and therein lies the problem, when you start talking
about the bad behavior or criminal past. Or it may not reach
the level of criminality; there is no one place you can go to
identify whether anyone has had fees, fines, penalties, has
been indicted, has negotiated settlements. Working under PTAMs,
there is just no place for the contracting officer to go to
determine whether these people have a history.
It is particularly problematic when you start thinking
about State of New Jersey has just debarred one of DHS's
contractors for the State of New Jersey. But there is no place
for anyone in the Federal Government to go find----
Mr. Platts. That is automatically made available to you?
Mr. Skinner. It doesn't exist. This is something we are
exploring right now.
Mr. Platts. I see my time is up.
In relation to that Mr. Skinner and other procurement
officials, I assume the effort of Mrs. Maloney in terms of
trying to better legislate that requirement so that there is a
one-stop shop per se is something that in theory would be
beneficial to your efforts to ensure that credible individuals
are doing business, and those who are less trustworthy are
identified early on?
Ms. Duke. I would add one caveat to your statement. We have
to be careful not to put contracting officers in the position
of GS-9s, in the position of having to judge whether an
indictment in a particular peculiar area of law, be it labor or
tax, is grounds for debarment from the government.
I think it is clear-cut that this is right or wrong if they
have a tax lien, but I think when we start in the area of
indictments and fines, the regulations require us to consider
mitigation. I really think we have to be careful that there is
a system in place that adequately can use that information and
appropriate uses it so we don't end up creating in essence a
blackballing system without the right people in charge of that.
Mr. Platts. Thank you, Mr. Chairman. My thanks again to all
the witness.
Mr. Murphy. Mr. Welch.
Mr. Welch. Why isn't it possible, as part of the
application process, to require the person or company seeking a
multimillion dollar contract from the taxpayers to disclose
whether they have been indicted, whether they have had labor
disputes that have resulted in actions, that they have had
ethical complaints?
Does somebody want to answer that question?
Mr. Woods. If I could start, there are provisions in the
standard solicitation for contractors to make those kinds of
disclosures. It may not be a totally comprehensive list, but as
Ms. Duke pointed out, efforts are under way, for example, to
add tax liens to that.
Mr. Welch. Why doesn't that work? If the governmental
entity is going to issue a contract, why isn't it known
immediately upon receipt of the application whether the person
or the company seeking the contract is a felon?
Why do we have to set up some elaborate process that
requires an enormous amount of computer software, another
expense, to get information that nobody's going to read?
Mr. Woods. They are required to make certifications in
terms of criminal activity, etc., but the problem is they are
not required to certify to a whole range of other actions that
some may want to consider in determining whether this is a
responsible contractor.
Mr. Welch. The obvious things are, A, have they had
disputes with the government where they have had to repay
because of poor billing, ripping off the taxpayer, any number
of things that your office investigates. Why can't that simply
be on the form?
If they have had disputes with labor that have resulted in
action, that result--as a result of that action that they had
poor labor relations. That is relevant to the contracting
officer; that information can be made immediately available on
the application process. You do not have to have a G-9 make an
evaluations about whether this is a threshold event or not.
Is there a problem in doing that, in getting the
information that Representative Maloney, in her effort, is
seeking?
Mr. Przybylek. We routinely in large competitions ask for
and provide a questionnaire that we want the customer--a
Federal contracting officer, for example--to fill out and send
back to us, so our evaluation board can take that into account.
The other thing----
Mr. Welch. Wait. Is it done or is it not done?
Mr. Przybylek. We do it routinely.
Mr. Welch. I am mystified because, in a short time, there
has been one example after another of colossal rip-offs of the
taxpayers. I have yet to find anyone--anywhere, for any reason,
for performance, for just massive fiscal rip-off--pay any
consequence whatsoever. And it is mystifying to all of us that
it doesn't seem to matter what you do, why you do it or how you
do it.
You all are coming in to investigate, and I would think it
would be kind of frustrating to you if your work was ignored,
in effect.
Mr. Woods. There are some consequences. For example, in
preparing for this hearing and going through some of our bid
protest decisions, there are many instances where, in rating
past performance contractors, contractors will be downgraded in
some cases very severely for the kinds of abuses that you
identified.
Mr. Welch. Mr. Friedman, let me ask you--when you have to
make a decision about when and whether to investigate, let me
ask you about that incident about the anthrax out there at the
nuclear facility where Wackenhut had a contract, and there was
an envelope that was opened in the vicinity of Mr. Chertoff, I
think, of Homeland Security; and no investigation occurred,
even though that was potentially a very serious national
security issue.
What is the threshold to make you decide, ``yes'' or
``no,'' to do an investigation when the mistake, negligent or
intentional, goes to the heart of the performance required,
namely national security?
Mr. Friedman. Maybe this is the ultimate answer to your
question. I am not aware of that situation.
Mrs. Maloney. Wackenhut. That is Skinner.
Mr. Welch. Mr. Skinner. Thank you.
Mr. Skinner. Yes, with the Wackenhut incident, that
contract was actually a Department of Defense contract. It
was--we received allegations in, I believe, February 2006, and
the contract was about to expire in March 2006. That--coupled
with the fact that we were doing the preliminary work on those
allegations, we were asked to step down by the two Senators who
referred the allegation to us for fear that those who made the
allegation would become known to the contractor.
Given those variables----
Mr. Welch. You were asked by what?
Mr. Skinner. The allegations came to us through Congress.
They came from employees of Wackenhut through Congress and were
referred to us.
We were in the process of taking a close look at those
allegations to determine whether they merited a close
investigation or a further review, when we discovered the
contract was not a Department of Homeland Security security
contract, but it was a DOD contract. Because the facility at
that time, early on, was in fact a DOD facility, and the
Department of Homeland Security had just moved in in March
2003.
And Department of Homeland Security--Elaine, I believe you
were involved in this as well--was in the process of rebidding
a security contract, the contract that was about to expire in
March; and I believe we actually took and bid and hired another
contractor in June.
Mr. Welch. The investigation was never completed, correct?
Mr. Skinner. That is correct. That does not mean that we
will not continue to take a very close look at that.
Mr. Welch. Take a close look at that now?
Mr. Skinner. The contract expired. The contractor is no
longer providing services for that facility; however, they are
providing services at other facilities, so our concern now is,
if they, in fact, had problems at that facility, who is to say
they are not going to have problems at other facilities?
Mr. Welch. If it happened a while ago and you think it is
still relevant, why hasn't it been investigated?
Mr. Skinner. The incident at the unit--because that
contractor is no longer employed there.
Mr. Welch. This is not making sense to me, with all due
respect.
Mr. Murphy. You may want to wrap up. We are about to----
Mr. Welch. You say it is still relevant to you because
Wackenhut has other contracts at other places and it is
relevant, what happened there, to determine whether the work
they do elsewhere meets the requirements of the taxpayer.
So obviously it means that if you want to get that
information, getting it sooner is better than later, right?
Mr. Skinner. Yes. And we are, in fact, planning to do that.
You have to understand, we have very limited resources as
well; and it had to work its way up the chain. It is something
that is on our to-do list.
Mr. Welch. We are all saved by the vote.
Mr. Murphy. Thank you very much, Mr. Welch.
One of the downsides of being a substitute chairman: We
have nine votes that we expect to take about an hour, so we
will be back here in approximately an hour to reconvene with
our second panel.
We thank all of our six panelists this afternoon, and we
thank you very much.
[Recess.]
Mr. Towns. I'd like to welcome our second panel.
As with the first panel, it is our committed policy that
all witnesses are sworn in. So please rise and raise your right
hands.
[Witnesses sworn.]
Let the record reflect that they have all responded in the
affirmative. You may be seated.
Robin Smith was a Wackenhut security officer at DHS
headquarters. Robin is a veteran of the U.S. Air Force where
she guarded aircraft on alert with nuclear weapons for the
Strategic Air Command, and she has worked as a security
contractor at other Federal facilities.
Welcome to the committee.
Lawrence Brede is senior vice president at Wackenhut
Services, Inc. He has worked on security at several Federal
nuclear sites and has retired from the U.S. Army.
Welcome to the committee.
Scott Amey is general counsel for the Project on Government
Oversight where he has worked on investigations of government
waste, fraud and abuse since 1993.
Your entire statements will be put in the record, so I ask
that you summarize in 5 minutes and, of course, allow us the
opportunity to be able to raise some questions with you.
So why don't we start with you, Mrs. Smith--Ms. Smith.
STATEMENTS OF ROBIN SMITH, FORMER WACKENHUT SECURITY OFFICER AT
DHS HEADQUARTERS; LAWRENCE BREDE, SENIOR VICE PRESIDENT,
WACKENHUT SERVICES, INC.; AND SCOTT AMEY, GENERAL COUNSEL,
PROJECT ON GOVERNMENT OVERSIGHT
STATEMENT OF ROBIN SMITH
Ms. Smith. Chairman Towns, Ranking Member Bilbray and
distinguished members of this committee, thank you for the
opportunity to tell you about my experience as a Wackenhut
security officer.
My work in private security has been an extension of my
military service. It's a privilege to serve my country and keep
it safe. I knew that serving in Homeland Security made my work
even more important, but I see my managers didn't take the work
that seriously.
While working for Wackenhut at the Department of Homeland
Security, my duties included monitoring the cameras located in
different buildings on the site, ensuring that all individuals
entering the building were properly identified, cleared and
documented. That gave me a lot of experience witnessing the
problems we had before access control: lack of training,
careless weapon-handling, open posts, failed security tests,
security breaches, falsified documentation, and the
irresponsible handling of hazardous substance attacks. I saw
the careless storage of weapons that could have had grave
results. On several occasions, I saw the weapon armory wide
open and unattended. When officers come off post, they go to
the armory to return their weapons and ammunition. The armory
was in the Program Manager's office. There have been times when
I saw the sergeants leave the armory open and unattended. I
also saw unattended weapons left in the lead weapon barrel
instead of being secured. There were times when the door to the
armory was left open, unlocked and unoccupied. If the door is
open, anyone can access the weapons armory.
There are many contractors working onsite at the Department
of Homeland Security. There have been times when I have walked
through the armory and have seen a loaded weapon there, a
weapon that could have been accessed by anyone. Any disgruntled
contract employee could easily walk through the open door, pick
up a weapon and ammunition, and any terrorist could do the
same.
There is a reason for some of this. We had a really high
turnover for the officers who worked extended shifts. Some
officers were so tired that they would make up for their lost
sleep on the job. On many occasions, there were supervisors and
officers caught sleeping on the job, but management never
reprimanded them.
But you can't blame sleeplessness for the way Wackenhut
security managers handled a suspicious letter that came to the
building where Secretary Chertoff's office was. This was at the
height of the anthrax scare. A DHS employee opened the letter
which contained an unidentified white powder. Some of it
spilled onto the employee's body. Two security officers got a
report of this incident and notified their superiors. When the
two lieutenants arrived at the scene, they could have isolated
the contaminated area and kept other DHS employees from
entering the area, but they didn't do that. Instead, they told
the employee to wash the powder off of herself, so she did that
by crossing the hall, passing Secretary Chertoff's office and
potentially contaminating a larger part of the building. The
white powder should be considered to be potentially dangerous,
but it was apparent that proper safety precautions were not
taken. Everyone in the vicinity could have been contaminated if
the white powder had been a chemical threat. The two
lieutenants observed and handled the envelope from all angles.
They didn't evacuate the section. The ventilation system was
still on, which left easily carried particles of the white
powder to other buildings with the--to other sections of the
building. The building was only evacuated when Federal
Protective Services arrived at the very late stages of the
event. I firmly believe that Wackenhut knew of these problems
and did nothing to rectify the situation.
I hope that my testimony today will help paint a more
complete picture of Wackenhut's performance, which I think
deserves congressional investigation.
I thank you, once again, for the opportunity to meet with
you today.
Mr. Towns. Thank you very much, Ms. Smith, for your
testimony.
[The prepared statement of Ms. Smith follows:]
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Mr. Towns. Dr. Brede.
STATEMENT OF LAWRENCE BREDE
Mr. Brede. Chairman Towns, Ranking Member Bilbray, and
members of the subcommittee, I too appreciate the opportunity
to participate in this subcommittee hearing today.
My name is Dr. Lawrence Brede, and since 2005 I have served
as the senior vice president and executive general manager for
the Department of Energy Operations in Wackenhut Services, Inc.
In that role, I oversee our protective services contracts
at five Department of Energy facilities: Oak Ridge, the
Savannah River Site, the Nevada Test Site, the Office of Secure
Transportation, and the Department of Energy headquarters.
Prior to that time, I managed our contract at the WSI Savannah
River Site for more than 12 years.
For 26 years, I was privileged to serve our country in the
U.S. Army, including service in three armed conflicts: Vietnam,
Operation Just Cause in Panama, and Operation Desert Storm in
Iraq. I commanded the elite military forces during my last two
combat tours.
Today, I am privileged to oversee other elite forces.
Wackenhut Services' operations include paramilitary protective
services, response teams equipped with rapid fire and other
special weapons, armored vehicles, helicopters marine patrol,
and other state-of-the-art security technologies. We are proud
to have served the U.S. Government for more than 40 years at
the Nevada Test Site, nearly 25 years at the Savannah River
Site and, since the year 2000, at Oak Ridge where we were
recently awarded a 5-year contract.
During that entire period, we have consistently been
awarded high performance ratings. For example, in 9 of 10 DOE
performance ratings over the past 5 years at the Nevada Test
Site, we have received scores over 95 percent. In our last 10
DOE performance ratings at Savannah River Site, we have scored
96 percent or higher, including five perfect scores of 100
percent. And at Oak Ridge, all of our performance ratings were
93 percent or higher, with an average score of 97 percent.
In addition, we have won numerous awards for our work,
including the South Carolina Governor's Quality Award, the
highest level of recognition in the South Carolina State
Quality Award process, and we won a similar award in the State
of Nevada. Underscoring our technical competence, WSI Security
Police Officers have won the national level Department of
Energy's Security Police Officer training competition 4 years
in a row.
I understand the primary reason we were invited to this
hearing is because of DOE IG reports regarding our contract
sites at Oak Ridge, TN. The conclusions drawn from each of
those reports have been challenged by senior Federal officials
at both the local and headquarters levels. It has been
incomplete because of a failure to consider all pertinent
information provided to the inspector general during those
investigations. In at least one case, the DOE's Office of
Independent Oversight--the technical oversight organization
within DOE--conducted an inspection of our training practices
and arrived at an entirely different conclusion than the DOE
IG.
Our security contracts receive extensive repeated scrutiny
by the government, not only by contracting officer technical
representatives at the local level, but also by the DOE's
Office of Independent Oversight, the GAO, the Defense Contract
Audit Agency, and other ad hoc special review teams.
Given the subject of this hearing, I am surprised and,
quite frankly, disturbed at how WSI's past performance on
government contracts could possibly be characterized as
``poor,'' considering the overwhelming evidence to the
contrary. The 8,000 men and women who work for Wackenhut
Services are dedicated, hardworking, patriotic individuals.
Most come from a military or a law enforcement background, and
our protective forces include former Army Rangers, Navy SEALs
and personnel from other Special Operations Forces.
I welcome this opportunity to address any concerns you may
have about our service to the government. We are proud that
many of our Security Police Officers have taken leave to serve
on Active Duty in Afghanistan and Iraq. We look forward to
their return, and we honor the memory of those Wackenhut
employees who, sadly, will not be returning to us, having made
the ultimate sacrifice of dying for our country in the war on
terror.
Mr. Chairman, I have submitted some additional materials
concerning our performance for the record. I thank you for this
invitation to set the record straight.
In summary, I will just reiterate how proud I am of the
work we do for the U.S. Government. Our protective forces are
well-trained and are as capable as any of the elite forces with
which I have served.
I will be glad to take your questions this afternoon.
Mr. Towns. Thank you very much, Dr. Brede.
[The prepared statement of Mr. Brede follows:]
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Mr. Towns. Mr. Amey.
STATEMENT OF SCOTT AMEY
Mr. Amey. Good afternoon, Chairman Towns and Ranking Member
Bilbray and members of the subcommittee. Thank you for inviting
me to testify today about the state of the Federal contracting
system. I am Scott Amey, general counsel and the senior
investigator with the Project on Government Oversight, a
nonprofit, public interest, watchdog organization founded in
1981.
POGO investigates and exposes corruption and other
misconduct in order to achieve a more accountable Federal
Government. Throughout its 26-year history, POGO has created a
niche in investigating, exposing, and helping to remedy waste,
fraud and abuse in government spending.
The subject of today's hearing is near and dear to POGO,
and I am excited to share POGO's view about contractor
accountability. I agree with everything that IG Skinner said on
panel I, except for one fact. There is one central depository--
repository for responsibility determinations, and that is the
Project on Government Oversight. POGO back in 19--or back in
2002 introduced a Federal contracting misconduct data base.
Today, we are re-releasing that data base that is more user-
friendly and with more instances. Currently, it has the top 50
government contractors, and it will eventually be expanded to
the top 100.
The difference--and I talked to IG Skinner after his
testimony--is we are a ``dot org'' rather than a ``dot gov,''
but it is a repository that government contracting business
should go to.
For years, POGO has been scaring public sources to compile
instances of misconduct for the top 50 Federal contractors. The
new data base, which covers instances of misconduct from 1995
to the present, includes the source documents for each
instance, drawing on government documents. That is DOJ press
releases, U.S. Attorney press releases, DOE press releases, and
the like. POGO hopes that the contracting officers will use it
as a resource when awarding contracts, to assure that taxpayer
dollars are only being sent to responsible contractors. POGO
will expand the Federal contractor misconduct data base to 100
contractors later this year.
Contractor misconduct is not on the wane. Currently, there
is widespread evidence of waste, fraud and abuse in Federal
contracting. The Department of Justice has recovered $18
billion since 1986, and just last year they reported a record
$3.1 billion that has been returned. The President's Council on
Integrity and Efficiency and the Executive Council on Integrity
and Efficiency reported last year that they have $9.9 billion
in potential savings from audit recommendations and $6.8
billion in investigatory findings. These councils identified
procurement and management--or ``procurement and grant
management'' and ``performance management and accountability''
as two of the most serious management and performance
challenges facing Federal agencies. Federal contracting
officers need to have comprehensive information on contractors'
culture of responsibility that is more readily available than
what we have here, than what we have now--misinformation.
The Federal Acquisition Regulations state that contracts
are only supposed to go to responsible contractors. I argue
that they are not. Without this information, major contracts
continue to be awarded to risky contractors.
As we can see by the discussions that we had earlier today
with panel I and also by even the Army's recent awarding of the
LOGCAP IV contract, Dyncorp has 3 instances of misconduct in
our data base; KBR has 5; and Flour has 21 instances of
misconduct. Their misconduct histories include false claims
against the government in violations of the Anti-Kickback Act,
fraud, conspiracy to launder money, retaliation against worker
complaints, and environmental violations. Some of those
companies have had questionable histories in Iraq and also in
responding to Hurricane Katrina.
First, the Federal Contractor Misconduct Data base reveals
that 50 percent of our contract dollars are going to those top
50 government contractors. As Representative Maloney stated
earlier, we also have instances where--we have 376 instances
that account for $12.5 billion. I don't claim that we have
every instance of misconduct. That's only what we've been able
to find, as someone mentioned on panel I, doing Google searches
and also going through Federal press releases. There are eight
contracts which have zero instances. So I have heard the
complaint before that when you have so much Federal contracting
dollars that it's just inherent that you're going to have
misconduct. But with 8 of the 50 having zero instances, I think
there are good contractors out there for the government
contractors to turn to.
Monetary penalties range from a relatively small $2,400
penalty paid by Honeywell in a State environmental enforcement
action to a record-setting $3.56 billion civil verdict against
ExxonMobil for gas royalty underpayments. The legislation
proposed by Representative Maloney, the Contractors and Federal
Spending Accountability Act, H.R. 3033, which mandates that the
government create a contractor performance and responsibility
data base and requires contractors to report such instances
when bidding on the contracts, will help to ensure taxpayer
dollars are going to responsible contractors.
For example, it will provide governmentwide access to
administrative agreements that are not shared by agencies.
Nearly a year ago, POGO FOIA'd administrative agreements, and I
have yet to have that for you in an insert. Why is H.R. 3033
needed, and why is POGO into this business? Because there isn't
currently a central repository for this type of information.
The government claims that they search papers, that they go to
the excluded parties' list. Past performance isn't the same as
contractor responsibility in all terms, and the excluded
parties' list had 7,300 cases last year in 2006. None of them
were--no large contractor was on the suspension and debarment
list. In our research, we have shown that Boeing is the only
contractor in the last 10 or 15 years to be on that list, and
they've had that suspension waived on three occasions, and it
only lasted 18 months.
I will just sum up that--I conclude by quoting President
Bush, who earlier this year stated ``Accountability is not a
way to punish anyone. Accountability to taxpayers isn't
punishment. It's a way to improve the way the government
works.''
Thank you again for this opportunity to share POGO's views
on responsibility in contracting. I am pleased to answer any
questions that you may have.
Mr. Towns. Thank you very much for your testimony.
[The prepared statement of Mr. Amey follows:]
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Mr. Towns. Let me begin with you, Ms. Smith. You indicated
certain things.
Were top DHS officials aware of the problems with the
performance at Wackenhut? Were the top officials aware of it?
Ms. Smith. I would say yes.
There was an incident where Secretary Chertoff came in and
caught guards, several times, acting inappropriately; and maybe
about 2 weeks into it, in one incident they lost control; they
lost the building, building 1, which was his office. At one
time, we had his office. There were guards that weren't
performing, and I don't know if he personally said something,
but shortly after that, we lost that one building.
Mr. Towns. So you think that he might have known about the
unprofessional behavior?
Ms. Smith. I think it probably took some time before
certain things got to his attention, but at a certain point in
time, it was just so blatant that you'd have to be blind not to
see it.
Mr. Towns. All right. Well, you have served in sensitive
security posts in both the Air Force and with other private-
sector employers. Were there any differences in the approaches
of delivering security services for a classified installation
between these experiences and the experiences you had with
Wackenhut? Was there any difference?
Ms. Smith. I've never seen anything like the way Wackenhut
ran Homeland Security. Homeland Security, I think, on any other
contract would have been considered the most prestigious
contract you could have next to the White House. I've worked
with other security companies, and any time there has been an
issue of officers' sleeping, inappropriate behavior, falsifying
documentation, I have never seen 24 hours go past without
someone from corporate headquarters coming down to investigate,
and I've never seen a situation in which people will repeatedly
do the same thing and report to duty the next day. I have never
seen it. I have never seen--I have never seen officers falsify
documentation, fill out their time sheets for the month in a
guard mount and the supervisors never say anything. I have
never seen officers leave a site with a weapon in D.C. not
being an SPO, and not being reprimanded for it. I have never
seen an armory left wide open. I have never seen an armory in a
project manager's office. I have never seen--I've never--I've
been--I worked at the Department of Interior, and we've had
several incidents with suspicious powder. I have never seen it
handled that way. I have never seen anyone take an envelope and
not know what the substance was and walk down the hall, walk
past the Secretary's office, look at it, call people over to
witness what they have, take it outside, let a few other people
see it, discuss it with people, and then call FPS Services to
investigate. I have never seen, never seen anything run the way
Wackenhut ran Homeland Security. I have never seen any company
disrespect a government contract to that proportion.
Mr. Towns. Let me just ask you some questions.
Were you ever terminated for poor performance?
Ms. Smith. Never.
Mr. Towns. What were your on-the-job performance
evaluations while you were with the company? Was it----
Ms. Smith. In the year that I worked there, we never got a
performance determination.
Mr. Towns. So, I guess we would have to say it was good.
You weren't fired.
Ms. Smith. I wasn't fired.
Mr. Towns. I think that's the conclusion there.
Do you have any lawsuits against Wackenhut?
Ms. Smith. No.
Mr. Towns. Why did you come forward at this time with what
you saw?
Ms. Smith. I have to be honest. Initially, I didn't come
forward. Another officer came forward and called me and asked
if--I was one person there who had access and knowledge of
several events, of probably any major event that would go on,
because I monitored the cameras and because I was emergency
dispatcher. So if something happened, I would get the call
first, and then I would notify the supervisors.
So I was one of three people, because there was three
different shifts that would have firsthand information. And the
other officer was really disgusted with some of the things he'd
seen. He went to the press, and I guess he got a lot of flack
for it, because nobody else would validate what he said. And I
have to be honest. I told him that I wouldn't bring the
information forward because I didn't believe anyone would
really act on it. I felt that this was Homeland. I knew
Wackenhut's top officials knew what was going on, because I
witnessed several phone calls, and I've made several myself, so
I knew that the head of the company knew, and I knew that
nothing had been done. And I really didn't think anyone was
going to investigate, and if they did, I thought it would
probably be handled--that it would make a news article; you
know, a lot of people would read it, and then, the next day,
it'd be shoved under the cover like so many things are.
So I really didn't believe that anyone really cared how the
contract was working on that site, but another officer asked
me, and I told him that--you know what? If somebody asks me, if
someone asks, I'd be open and honest and tell what I knew. And
someone asked me, and that's why I'm here today.
Mr. Towns. Thank you very much.
At this time, I yield to Ranking Member Bilbray.
Mr. Bilbray. Thank you.
Mr. Amey, you were discussing the problems with Boeing. Do
you think that they should be eliminated from consideration for
any contracts? Should they be disqualified based on what you
know about them?
Mr. Amey. Should they be disqualified? That's a judgment
call where I think you need some flexibility. But what I think
we need is we need openness in the system; we need to make sure
that contracting officers are taking a look at their overall
record, not just their performance record.
Like I would imagine, and as the doctor has testified, his
company has a wonderful performance record. I'll predict that
contractors have satisfactory performance grades. But are
contracting officers taking a look at their criminal history,
their civil history and their administrative history? If
they're not, then the taxpayers aren't getting the best deal.
Mr. Bilbray. Well, wait. Whoa, whoa, whoa, whoa.
Now I'm asking you about somebody you do know. And first of
all, when you talk about some of these histories, I have a real
problem in trying to figure out--if it wasn't a company, if it
was an individual, and I was a public employee saying, I'm
going to consider--I'm going to now--you've worked for me in
the past and I find out that you've got something in your
record that you didn't disclose.
Now that's the question you get into. Are you talking about
something they were required to disclose or are you talking
about something like--a good example is misconduct. Are we
talking about--what constitutes misconduct? Is that being
charged with misconduct? Is that being proven with misconduct,
or is it both?
Mr. Amey. In our data base, we do have both. We have actual
instances of misconduct, and we have pending cases.
Mr. Bilbray. You know, I'll tell you something. If it's an
individual--and if I tried to do this as a mayor, to somebody
who is one of my employees--I'd be dragged out before the
courts right and left, based on charges.
The fact is, you know, we've had to abandon the concept of
``Have you ever been arrested?'' in the State of California.
You have to say, ``Have you ever been convicted or sentenced?''
Just to be charged has never in this country been an assumption
of guilt.
Mr. Amey. Well, our pending cases aren't. Our pending cases
are left very open, and I think our data base is very fair. In
instances of misconduct when they move over from a pending
case, when we combine instances where there's been a fine, a
settlement, a penalty, we do have what we call ``investigative
findings,'' but those are left as administrative and with a
zero balance. We include them in there only so that contracting
officers and government officials have the full scope of a
contractor's performance and responsibility record.
Mr. Bilbray. Do you agree that allegations being included
play suspect on the whole thing because it becomes part of an
angle? I know the fact that--competing companies. You have
competing companies who love to play these games. You have
people at organized labor that will use this as part of a
tactic to be able to--as part of the negotiation games. The
fact is--we can get so many employees to charge, but the fact
is, if allegations are given weight, that raises a whole lot of
concerns about the credibility of the entire process.
Mr. Amey. I agree with you, and that's--the purpose of our
data base is, actually, not to include a labor violation where
somebody didn't have their hardhat on.
What we've tried to do is get to real instances of
misconduct in which there's a violation of Federal law--arms
export violations, false claims--you know, things that are very
germane to the government.
Mr. Bilbray. But where it has been proven----
Mr. Amey. Yes.
Mr. Bilbray [continuing.] Not just where somebody has
accused them?
Mr. Amey. Yes.
Mr. Bilbray. OK.
Mr. Amey. Down to--also, into administrative agreements. We
do include those, which I know the contracting industries do
get upset with us for including those types of cases. But we do
include them when they're fined penalties and settlements that
are attached to them.
Mr. Bilbray. You start by saying we consider--we include
the charges without their being proven. Now you're saying that
you want to go back and say it should be only those things that
have been adjudicated.
Mr. Amey. No. I said that we do include pending cases. We
do have them on a side column, but they are not part of our
instances of misconduct.
Mr. Bilbray. Well, pending cases can last for 10, 15 years.
Mr. Amey. No doubt about it.
Mr. Bilbray. You're putting a cloud over somebody's head
who's just been charged, and I'll tell you that's a big
concern. But I'm back to Boeing.
Mr. Amey. Right.
Mr. Bilbray. You identified Boeing as being a bad character
in this process. If we struck Boeing out of the process, would
that be good or bad?
Mr. Amey. Well, personally, the Project on Government
Oversight would say, ``Well, that's probably a good thing
because I think there are other places you can go for that
business.''
Mr. Bilbray. And where would we go?
Mr. Amey. I think there are other contractors out there. I
think if we debundle contracts, there are other vendors that we
can go to to provide that work.
Mr. Bilbray. OK.
Mr. Amey. What I heard from the government in asking about
the listing of Boeing's suspension when I talked to the
official was they said, ``Off the record, I will tell you we
had to waive it on three occasions because we had nowhere else
to turn.'' It ended up being a consolidation of the industry
issue, which is bad for the taxpayer overall; which POGO's
fought consolidation for many years in the defense industry,
and I think we'll have to get into it in the IT sector, but----
Mr. Bilbray. Well, let me tell you something. You talk
about the big guy. The fact is that I've seen again and again
in my 30 years in politics where Washington, DC, and government
intervention has killed the little guy, killed the little guy.
And then it complains when there's a monopoly for the big guy
because the little guy did it.
I mean--I'll just digress, Mr. Chairman, but people are
wondering why big oil has such an influence in this country.
It's because we've killed little oil with government regs and
with tax cuts. We've basically run the competitors out of the
market. And it's Washington doing this, saying, ``We're going
to protect the consumer.'' And we've shafted the consumer down
the line, and I'm just concerned that when we do this
oversight, we make sure we do it with an outcome that matters.
And, you know, I have to say that effect on competition has to
be a consideration; wouldn't you agree?
Mr. Amey. 100 percent. We have been fighting the bundling
issue for many, many years.
Mr. Bilbray. And bundling is there. You heard my reference
to the liquidation of the savings and loan assets.
Mr. Amey. Right.
Mr. Bilbray. A classic example. Now, that was in-house.
That was Federal Government employees making a decision----
Mr. Amey. Right.
Mr. Bilbray [continuing.] And throwing billions of dollars
of taxpayers' money away because they didn't want to bother
with the little guy.
Mr. Amey. Right.
Mr. Bilbray. Wouldn't you agree?
Mr. Amey. Yes.
Mr. Bilbray. Mr. Chairman, I just want to make sure that as
we get into this that we make sure that we keep an eye on the
fact that--let's not go in and do more damage and then wonder
about the problems we've done in the past. The outcome of how
we handle this is what is going to be really critical, and I
think--I appreciate your testimony on that. I just want to make
sure that when we go in there and start whipping, we understand
that we may be whipping the only, you know, horse that can pull
us on here, or keep as many horses in so we can pick the best
one, so we don't end up in a situation of not having a choice
into it.
Now let me just say publicly--I want to say something
because I happened to have the privilege, when I was very
young, of building the most cost-effective transit system in
America in a place where people said you couldn't do it: San
Diego, CA, Southern California. And we built that line, and
there were people that built political careers on that.
Congressmen went out there. You've got Pete Wilson, who became
Governor and Senator, if you'll remember, and Bechtel built
that line, and I will go to my grave knowing--I don't know what
they're doing with these other contracts, but there was no way
in the world I wouldn't testify that Bechtel was the best
company that I could ever work with. It created miracles, and
they did great things.
Now, people may want to attack them--and they're not here
today to defend themselves--but I will say for the history that
when I built a system in San Diego County with some--the
toughest problems in the world, Bechtel delivered in a way that
the people of San Diego County are going to benefit for 100
years on.
With that, Mr. Chairman, I will yield back.
Mr. Amey. If I may just say, I agree with the ranking
member and your comment earlier with the first panel.
This isn't to point fingers at contractors. This is really
a genuine issue of contracting officers and the way we're
awarding contracts. It really gets down to a very circular
argument about government contracts. And you hit the nail on
the head with competition. If you only have five different or
two different vendors that come forward, then at that point you
do have to make a best-value determination and pick the best of
those two.
My hope here is that we can incorporate all of these things
together, get more competition and pick the best vendors
available without picking risky vendors. That's where I think
the question comes in. Are we picking responsible vendors or
are we picking risky vendors?
Mr. Bilbray. And I appreciate that, and I thank you very
much. And let me just say, because we brought up this hearing
and we're specifically looking at security in some of these
facilities--if I could ask the chairman to consider one thing,
which is that one of the shocks I've had working on Homeland
Security stuff when I--when the voters gave me my 5-year
sabbatical from Congress, is that today, as far as I know, the
Pentagon is still using the same antiquated access system/swipe
card that it was using on 9/11, with no biometric confirmation,
with no face recognition technology. It's basically using
technology that's 30 years old and have not--anybody who ends
up being able to acquire one of those cards, either by theft or
by persuasion, could enter that facility. And I think that we
ought to be looking at what we're doing to make sure that we're
doing the right thing so contractors can do the right thing.
I yield back, Mr. Chairman.
Mr. Towns. Thank you very much.
Mr. Murphy.
Mr. Murphy. Thank you, Mr. Chairman.
I want to thank the panel for being here today and sticking
with us throughout our votes.
Mr. Brede, I want to thank you for being here, especially
given the fact that the other subject of our hearing today
chose not to attend.
Ms. Smith, I want to thank you very much for your service,
prior to your work in private security, in the U.S. Air Force
and would appreciate you opining for a moment on the comparison
between the training. You've talked a little bit about your
experience on the job. I want to talk for a second about the
training that you received prior to your time in preparation
for your service in the Air Force and during your service
there, versus the training that you received as an employee of
Wackenhut.
Ms. Smith. The training--I want to be fair to Wackenhut
also. The training doesn't compare to the training I received
in the Service because it was intense. It was a test program.
They enlisted--at that point in time, there weren't women
combat-trained in the Air Force; other branches, but not the
Air Force. So when they enlisted the 125 women, the training
was intense.
We went to Camp Bolus. We trained at an Army base. The
training was very, very intense. And as far as the Air Force
goes, you had women in there, and the government wanted to make
sure that if those women went to war, we could stand beside any
man and do our job. And I believe we could.
As far as the training with Wackenhut, I went to the range
and I qualified, and that was pretty much it. I wanted to
qualify at the range, and I'd already known how to shoot. I'd
been trained previously. When I went to Wackenhut, I went with
my credentials. So me personally, I felt I was already very
well-trained. What I have to say is that--taking me out of the
situation--I ask, how were the rest of the guards as far as
training?
At Homeland Security, there were guards who never qualified
at the range. They were still allowed to carry a weapon. We had
several--we had three--to my knowledge, we had three guards and
there probably were more, but I'm only going to talk about what
I know personally. We had three guards who failed the range
five times and were still working, still carrying a weapon,
never passed the range. At a certain point in time when we knew
there was a new contractor coming in when the contract--when
the contract was almost at its end--and I'm going to say 2
months before the contract officially ends is when they started
sending us to training so that we'd have something official on
the record.
But initially, when I came in, I came in with my SPO. I
have a license in Maryland and Virginia, and the only thing I
had to do was qualify at the range, which I did. So I said it
to say that the person sitting on my right and my left may or
may not be able to handle a weapon, may or may not be able to
shoot.
Mr. Murphy. How about training in the disposition of
suspicious packages or training in regards to the proper
response to a chemical attack or a nuclear attack?
Ms. Smith. We had extensive training in the military on
that, obviously, training on crowd control, training as far
as--we played war games. It was Strategic Air Command, so I was
always on alert. For a week at a time, the alarm would go off,
and once that happened, you had to react. So, being in the SAC,
it was 24 hours a day of playing war, and we played it serious.
There were consequences if you didn't perform.
As far as Wackenhut goes, other than qualifying at the
range, I worked there 8 months without any kind of official
training. The only time training took place was at the end of
the contract when the rumor was that there was going to be--the
new contract was going to require GSA training, GSA
certification. So at that point in time, when that information
was given out at the last few months of the contract, they had
a GSA class that we went to. But prior to that, I worked on
that contract 8 months with no training.
Mr. Murphy. And had you not had training in the Armed
Forces related to terror attacks and suspicious packages, you
would not have received the training up front?
Ms. Smith. No. Actually, I worked for another company, and
the HAZMAT training I received from them and the weapons
training and the crowd control--all of that I received at
another company, and I brought that to Wackenhut. As far as
being trained by Wackenhut, the only official training I
received was qualifying at the range.
Mr. Murphy. Dr. Brede, that leads to an obvious question. I
take Ms. Smith's testimony. I put it together with articles in
the paper referencing interviews of 14-some-odd employees under
the same contract, one of which testified that when he was
presented with a suspicious package, he said, ``I didn't have a
clue what to do.''
And I wonder whether that makes you reconsider a statement
made under oath here today, that you believe that the employees
of Wackenhut are as well-trained and as capable as a member of
the U.S. Armed Forces.
It strikes--and I guess I ask that question because I'm not
sure that they should be as well-trained as members of the U.S.
Armed Forces. I think that they should receive much more
training than it sounds like they have. But your statement
today strikes me as a bit out of line, given the testimony that
we've received today and testimony of other employees, and I
would like to know if you would like to reconsider that
statement.
Mr. Brede. I will consider that statement, and I stand by
it. What I said was--and I oversee elite forces that are
equivalent to the forces that I served with in the United
States--and I do. I oversee our DOE Special Police Officers,
Security Police Officers.
You have to understand the contract that we had at the DHS
building was not a DHS contract. In fact, what it was--it
started out as a facilities maintenance contract with the
Department of the Navy. There was a small security piece of 12
officers. Our contract with the Navy required minimal security
training. DHS later moved into that facility and, over time,
eventually took over the building but not the contract. In
fact, we were held to contractual requirements by the
Department of the Navy. We still have that contract today and
continue to serve the Navy. The training that we provided our
officers met the requirements of the contract.
To a point made by the ranking member earlier, allegations
are easy to come by and we are hearing some of them for the
first time today from Ms. Smith. We've heard a few others in
the past from disgruntled employees who'd been terminated and,
in fact, who have been co-opted by the Service Employees
International Union, an organization with an agenda that has
mounted a campaign against us, a corporate campaign to besmirch
our reputation. They have----
Mr. Murphy. Are you alleging that Ms. Smith is part of
that----
Mr. Brede. I don't know if she is or not.
I'm saying that the only allegations we have previously
heard are those who have--those that had been made by
disgruntled, terminated employees who have gone to the press
and which we have investigated. I am hearing others today for
the first time.
Mr. Murphy. You draw issue with the reports of that
contract in which individuals were not properly trained in
terms of how to dispose of suspicious packages or with regard
to potential instances of terrorism there. Do you believe that
there was proper training for those potential incidents at that
facility?
Mr. Brede. No. What I said was that there were--the
training that we conducted at that facility met the
requirements of the Navy contract. I would tell you that DHS
expected a higher level of security training, and when they let
out--let their procurement, they looked for a higher level of
security. We did not win that contract, but we never had one
with them there in the first place. It has been
mischaracterized as a DHS contract and one which we've had, and
we have not--we did not have one with them there. We have
several contracts with DHS elsewhere.
For example, during Katrina, we were called upon because no
other security company--or at least security companies called
before us, could not deliver the number of officers to be
trained and put out to the field in time to meet that awful
disaster.
Mr. Murphy. Mr. Chairman, I know I've gone well over my
time here. I understand the tried-and-true method of deflecting
accusations is to try to dispute the integrity of those who
would accuse. I think we have made it very clear that Ms. Smith
here has no ax to grind; in fact, she was an accomplished
employee. And I would just say that I think the allegations
that have been made are not necessarily that you didn't live up
to the terms of the contract. It was the allegations being made
here that the compromise--that the safety of that institution
was compromised. That may be related to the work of Wackenhut.
That may be related to the specs of the contract. But I think
at least we leave here understanding that those--that those
accusations that have been leveled in the Associated Press
report and those by Ms. Smith today are ones that I hope we can
all agree need to be addressed going forward.
Mr. Brede. I have invited the DHS IG to look at the
incident. I hope he does, as he was asked to do earlier; to
look at the incident involving the white powder, an incident in
which no WSI employee handled that powder. We wrote to the
Secretary, pointing that out, and we would--we will certainly
welcome any investigation looking at that particular incident.
Mr. Murphy. Thank you, Mr. Chairman.
Mr. Towns. Thank you. Thank you very much.
Let me just sort of go further here, Dr. Brede. You know,
Ms. Smith came here and I asked her some questions. I asked
her, I said, ``Were you terminated because of poor
performance?'' she said, ``No.'' I asked her were you--``What
were your evaluations?'' she said, ``Good.'' Then I asked her
did she have any lawsuits, you know, with the company, and she
said ``No.'' And then I asked her, you know, ``Why would you
wait until this point to come forward?'' she indicated, you
know, and gave an answer that, I think, was very acceptable,
you know, and I'm sure that she was struggling with it and
finally made a decision, you know, to come. And she indicated
some things there that--and I would like to just hear you
respond to them because, you know, she didn't get fired, you
know.
Mr. Brede. She did not.
Mr. Towns. She didn't have a bad evaluation. She didn't
have any of those things. She comes to us, as I get it, out of
real concern. And to me that's important.
So I would like for you to sort of respond to the things
that she talked about here in terms of--you know, could you
just sort of go over that and let me know in terms of what
happened, you know, as far as you're concerned?
Mr. Brede. I can respond to two of them.
As I pointed out earlier, I am hearing the others for the
first time today. One of the allegations, I believe, had to do
with access control. Once again, it's a criticism leveled at us
through the news media, again, by a terminated employee co-
opted by the SEIU. We performance-tested that particular
measure and, quite frankly, did quite well at it. We had layers
of security. And you have to understand, in a facility like
that, you've got layers of security, and the closer you get to
potential targets, the tougher that security is.
The other, I believe, in her testimony had to do with time
sheets. We conducted an internal audit of that. I am not
familiar with the results of that audit, but I could certainly
take that for the record and make that available to you.
Those are the only ones that I'm familiar with. I'm not
familiar with the others, and I'm not, quite frankly, prepared
to address them today.
Mr. Towns. Ms. Smith, let me ask you, did you ever report
any of this to Wackenhut or to DHS, any of this?
Ms. Smith. When I worked at Wackenhut, I was there 2 weeks,
and so I can't tell you how what I am about to explain came
into it. I can only tell you that 2 weeks into the job, an
official from Wackenhut, from their corporate office from
Florida--I don't know if it's the corporate office. An official
from Florida came to the site because, I'm assuming, prior to
that there were so many complaints from officers that somebody
from Wackenhut came to the site to see what was going on. I'd
only been with the company 2 weeks. I was actually going
offsite when someone said, ``There's a meeting you're supposed
to be at,'' and I said, ``Well, I didn't know about it.'' So I
went to the meeting, and what happened was this:
The officers started telling them different issues that
were--that was going on. As they went around the table, when
they got to me, I said, ``Well, you know what? I've only been
here 2 weeks, so anything I can say can only be based on a 2-
week observation.'' And I don't remember the gentleman's name--
I could find out--but he said, ``Well, in 2 weeks, what have
you seen, and what do you think?'' I said, ``In the 2 weeks
that I've been here, I would seriously, seriously make some
changes.'' I said, ``You have employees who--you're working
them--some employees are working pretty close to 24 hours a
day.'' I said, ``You have an employee who came in to work''--my
shift started at 6 a.m. I said, ``When I came to work, he was
there,'' which meant he had been there on the night shift. I
said, ``When I went to lunch, he was here.'' I said, ``When I
came back from lunch, he was gone.'' I said, ``But when I
left--when I went to go home, he was here,'' which means he
lives someplace near, got about 2 to 4 hours' sleep and came
back. I said, ``He's been here for 24 hours. He's carrying a
weapon.''
I said, ``In the 2 weeks I've been here, the weapon I drew
out the other day fell apart.'' The barrel came off the .38,
which means that it had just been placed up there, which means
it had to be damaged. I said, ``So you have several weapons in
there that don't even have handles on them.''
I said, ``In the 2 weeks I've been here, you have officers
who are sleeping on posts.'' I said, ``So my concern is that
there are things going on here that your corporate office may
not know about.'' I said, ``The things--all the things that I
see are things that can be addressed. I do not see any--I've
only been here 2 weeks, so I don't see anything major,'' I
said. ``but I see something that's starting to build, and if it
were my site, I'd be concerned and I would start asking the
supervisors what is going on here.''
And he said they were going to do a thorough investigation.
He pulled me to the side later. We talked a little bit about my
previous experience, and he said--he guaranteed and assured me
that, you know, he appreciated me telling him the things I'd
seen. And I even told him, I said, ``I don't know. I said this
is the first time I've ever met the project manager of this
site. I didn't even know who he was,'' I said, ``so I don't
want him in a situation that maybe he doesn't know, but these
are the things that are going on that I've seen within 2
weeks,'' I said, ``and they need to be addressed,'' you know.
And he assured me that it was going to be taken care of. He
left. I never heard from him again, and it escalated. It just
went from bad to worse.
Mr. Towns. Well, you know--thank you very much, Ms. Smith.
You know, Dr. Brede, I come from the school of thought that
where there's smoke there's fire. And of course, you know,
there's a lot of allegations that have been passed along here
in reference to the company. Now I'd say maybe one was not
accurate, two maybe, but there's just too many things here, you
know. And I'm just listening to Mrs. Smith--Ms. Smith--who
indicated in terms of her experiences here--and she has no
reason, you know, to make up or to create, you know, and I just
want to hear you.
I think that there's some things here that need to be
corrected. I mean--and I think they're very serious because of
the fact that when it comes to security, that's a very serious
matter in this day and age, and more than ever. And I think
that you need to revisit this and to try and straighten these
things out, I think, rather than saying, you know--you know,
there are allegations, but the point is that there's a lot of
allegations here, and I think that there's just too many for me
to just sort of brush them off or push them off as just
statements or somebody, you know, making some comments or some
union that's upset.
There's a lot going on here. And of course, I need to hear
you respond to that. I mean, of course, I know you're saying
that you weren't aware of it and you didn't know about it, only
two of them. But this is a lot not to know about. I mean, let
me ask you this: Do you read the paper?
Mr. Brede. I certainly do read the paper, and I would tell
you once again--and I don't think we can easily dismiss the
reports that are prompted by--specifically by the Service
Employees International Union.
One of the things I would wonder is if Mrs. Smith has been
prompted in any of this, for example, by the SEIU. There are
distortions of fact. There is misinformation continuously put
out in an effort for that union to displace--the unions that
I'll represent are fine officers. It's something that we have
refused to submit to. We don't take allegations lightly.
For example, the allegation of cheating at Oak Ridge. I am
very much offended by that. Once the IG looked at that, we did
an internal investigation. Not only that, but there was yet
another review conducted by the National Nuclear Security
Agency. They came to a completely different conclusion than
the--than the IG.
For example, someone asked the question earlier, you know,
was that really cheating? What that incident had to do with was
a validation of a computer model, using an exercise on the
ground to validate the validity of a training tool. Hence,
people were indeed briefed on the scenario. We found that there
was a difference between the computer simulation tool and the
way our response would be executed on the ground. So that
information was provided to the IG. We never heard anything
again back.
So we do take investigations--allegations seriously. We
investigate them. If we knew of all of these at the time Ms.
Smith was there, believe me, we would certainly investigate
them. And I invite an investigation of them now, as I told the
IG from the Department of Homeland Security today.
Mr. Murphy. Mr. Chairman, can I ask just one last question?
Thank you, Mr. Chairman.
I just want to note for the record this isn't just
promotional material sent out by SEIU. This hearing is convened
because of reports from the IG's office, because of independent
media reports by fairly reputable organizations such as the
Associated Press. So this is not simply one particular group
with an agenda. These are independent sources as well. That's a
comment.
The question is this: In our interchange, you talked about
the changing circumstances on the ground in that contract, and
you created a distinction between meeting the parameters of the
requirements of the contract versus doing what may or may not
be necessary to truly secure that facility.
As the--if you believe--and this is a question I'm just
curious about: If you believe as a contractor that the
requirements of the contract are not sufficient in order to
meet the security needs of the building, if the tenant changes
in this case, which would prompt the security force to be
elevated, do you believe it's the responsibility of the
contractor of the agency providing security to either change of
their own volition the security standards for that facility or
to go back to the contracting agency and suggest that the
contract be changed?
Mr. Brede. That's a fair question.
I believe it is our responsibility as a security contractor
to offer our professional advice to the agency and advise them
as to what is needed.
Mr. Murphy. Thank you, Mr. Chairman.
Mr. Towns. Thank you very much.
Let me just ask you something really quickly.
You know, Carolyn Maloney, who is a member of this
committee, has a bill, and of course--in terms of data base and
on the contract performance, and I know you have.
What's the difference between what she has and what you're
doing?
Mr. Amey. Very little. And we've supported Representative
Maloney with that bill for many years, back to when she first
introduced it in 2002. That was when our original contractor
misconduct data base came out, and we've supported her every
year since then. So I've actually taken a look at the bill.
I've seen the provisions in the bill. The things that she's
added has changed a little bit this year from the previous
years, but I think she's getting two--what Inspector General
Skinner stated earlier was she's getting two very objective
standards that can be used by contracting officers to evaluate
the responsibility level of Federal contractors, and that's
what we need. We have a real gap there.
Mr. Towns. Let me thank all three of you for your
testimony, and I think that it's very, very important that we
do not take this lightly and--because, as I indicated early on,
you know, security is very important. And I don't think we can
just sort of like pass this off as some labor union is creating
an issue or creating a problem, you know. I think this is
something that needs to be addressed and needs to be addressed
very seriously. And I want you to know that's my views and my
feelings on it, and we're not going to go away. We're not going
to go away. There's just too much of this going on, and we have
to do something. And of course, this is the committee to do it.
Thank you very, very much. I appreciate your testimony.
This hearing is adjourned.
[Whereupon, at 5:50 p.m., the subcommittee was adjourned.]