[Congressional Record Volume 154, Number 122 (Thursday, July 24, 2008)]
[Senate]
[Pages S7272-S7274]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    NOMINATION OF JAMES A. WILLIAMS

  Mr. GRASSLEY. Mr. President, today I rise to express my opposition to 
the nomination of Mr. James A. Williams to be the Administrator of the 
General Services Administration, GSA. My concerns are based on my 
investigation of a dubious GSA contract with Sun Microsystems. In 2006 
and 2007, my oversight staff conducted a thorough inquiry into the GSA 
Multiple Award Schedule contract with Sun Microsystems for computer 
products and services. GSA inspector general, IG, auditors had alerted 
GSA's top management of alleged fraud on this contract as early as 
2005.
  In 2006, Mr. Williams became the Commissioner of the GSA Federal 
Acquisition Service, FAS. His office was directly responsible for this 
questionable contract with Sun Microsystems. He and Administrator Doan 
were alterted to the alleged fraud and the referral of the matter to 
the Department of Justice, DOJ.
  I previously made the findings of my inquiry known in a floor 
statement on October 17, 2007.
  In a nutshell, all the evidence developed in my oversight 
investigation appears to indicate that top-level GSA management, 
including Administrator Doan and FAS Commissioner Williams, may have 
improperly interfered in the ongoing contract negotiations with Sun 
Microsystems in May-September 2006; and Administrator Doan and Mr. 
Williams pressured the GSA contracting officer to approve the new Sun 
contract even though they both knew that the IG had detected alleged 
fraud on the existing Sun contract and had

[[Page S7273]]

referred the matter to the DOJ for possible prosecution/litigation. 
This case is now pending in Federal court.
  The facts appear to show Mr. Williams, as FAS Commissioner, failed to 
act in the best interest of the American taxpayer. He had the 
opportunity to put an end to or bring into compliance a contract that 
was allegedly fraudulent, but in the end he could not do it. Instead, 
he sided with former Administrator Doan by taking steps to remove the 
GSA contracting officer. When the final contract was signed with Sun 
Microsystems by a newly appointed contracting officer, he chose to look 
the other way. He didn't even try to have the IG audit or examine the 
terms of the proposed contract. At the very least, this was a very poor 
management decision by Mr. Williams. It was a deplorable error in 
judgment that he probably regrets today.
  We need a strong leader at GSA. The responsibilities of GSA 
Administrator require an individual who will stand up to anyone to 
protect the financial interests of hard-working American taxpayers. 
Although I agree he is well qualified and a devoted civil servant, I 
don't believe Mr. Williams has the bureaucratic and intestinal 
fortitude to make the tough decisions at GSA when it matters.
  Reports of alleged fraud on the Sun contract surfaced on his watch. 
He knew about the alleged fraud. The taxpayers may have been cheated 
out of tens of millions of dollars. As FAS Commissioner, he was the top 
GSA official responsible for making the tough calls, and he chose not 
to protect the taxpayers. He made the wrong choice. He is now 
accountable for that decision. Because he failed to protect the 
taxpayers at a crucial moment, we should not elevate Mr. Williams to 
high office.
  For all these reasons, I oppose his nomination to be GSA 
Administrator.
  Mr. Williams's nomination is now before the Homeland Security and 
Governmental Affairs Committee. On July 22, I wrote to the chairman, 
Senator Lieberman, laying out the reasons behind my opposition to this 
nomination.
  I ask unanimous consent to have that letter printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                      U.S. Senate,


                                         Committee on Finance,

                                    Washington, DC, July 22, 2008.
     Hon. Joseph I. Lieberman,
     Chairman, Committee on Homeland Security and Governmental 
         Affairs, U.S. Senate, Washington, DC.
       Dear Senator Lieberman, I am writing to express opposition 
     to the nomination of Mr. Jim Williams to be the Administrator 
     of the General Services Administration (GSA).
       My opposition to Mr. Williams' nomination is rooted in an 
     in-depth oversight investigation conducted by my staff in 
     2006-2007. This investigation focused on the re-negotiation 
     of a Multiple Award Schedule contract with Sun Microsystems, 
     Inc. for computer products and services. The contract was 
     initially awarded to the company in 1999. Sales on this 
     contract totaled $268,987,689.00.
       The results of this investigation were presented in three 
     separate reports in October 2007. These reports were provided 
     to your committee, Administrator Doan, the House Oversight 
     Committee, the White House Chief of Staff, and GSA Inspector 
     General (IG). In addition, there was a follow-up report 
     issued by the U.S. Postal Service in May 2008. None of these 
     reports have been released to the public. However, on October 
     17, 2007, I spoke about the findings in these reports in very 
     general terms on the floor of the Senate. My remarks appear 
     on pages S12952-12954 of the Congressional Record.
       At the time of my investigation, Mr. Williams was the 
     Commissioner of GSA's Federal Acquisition Service (FAS).
       In a nutshell, all the evidence developed in my oversight 
     investigation appears to indicate that: 1) top-level GSA 
     management, including Administrator Doan and FAS Commissioner 
     Williams, may have improperly interfered in the ongoing 
     contract negotiations with Sun Microsystems in May-September 
     2006; and 2) Administrator Doan and Mr. Williams pressured 
     the GSA contracting officer to approve the new Sun contract 
     even though they both knew that the IG had detected alleged 
     fraud on existing Sun contract and had referred the matter to 
     the Department of Justice (DOJ) for possible prosecution/
     litigation.
       The IG auditors first blew the whistle on alleged fraud on 
     the Sun contract in 2005--at least a year before Mr. Williams 
     became FAS Commissioner.
       The GSA IG auditors had the Sun contract under a microscope 
     for several years. They had uncovered extensive contract 
     violations, including potential civil and criminal fraud. 
     These problems were first reported to GSA acquisition 
     management in February 2005. The IG auditors briefed DOJ on 
     the alleged fraud on April 20, 2006. In April 2007, DOJ 
     charged Sun in a False Claims Act suit. That case is now 
     pending in the Arkansas Federal Court District (Norman Rille 
     and Neal Roberts vs Sun Microsystems, Inc.).
       The GSA IT Acquisition Center staff was briefed on these 
     issues on May 2, 2006. FAS Commissioner Williams ``grilled'' 
     the IG auditors about the alleged fraud and DOJ referral 
     during the contract ``Impasse'' briefing on August 14, 2006. 
     On August 29, 2006, Administrator Doan was briefed by the IG 
     audit team on the decision to refer the Sun contract to DOJ 
     for possible prosecution/litigation. Mr. Williams and Ms. 
     Doan discussed the alleged fraud on the Sun contract on 
     several different occasions in August 2006.
       Despite the red warning flags raised by the IG auditors, 
     according to my findings, Administrator Doan and Mr. Williams 
     pressured the GSA contracting officer to sign the contract. 
     When that person refused to sign the contract, they had the 
     contracting officer removed and replaced under duress.
       The record shows that Mr. Williams played a key role in the 
     removal of the contracting officer as follows:
       A high-level meeting--known as the ``Baltimore Conference 
     Call''--was held on August 31, 2006. All the key players 
     participated, including Commissioner Williams. According to 
     interviews with a number of participants, Mr. Williams made 
     it very clear that the Sun contract was of ``strategic 
     importance'' in Administrator Doan's view, and it had to be 
     awarded. Still, the contracting officer refused to back down 
     in the face of mounting pressure from the very top. He had 
     dug in his heels and refused to sign what he considered a bad 
     contract. During interviews, the contracting officer told my 
     staff that he thought the price reduction clause, discounts, 
     and maintenance deals offered by Sun were ``essentially 
     worthless,'' and he said he was equally concerned about the 
     alleged fraud referral to DOJ. Mr. Williams then asked the 
     contracting officer if he wished to step down, and the 
     contracting officer accepted the offer.
       Under standard GSA procedures, contracting officers make 
     the final decision on whether or not to sign a contract. They 
     have ``Go No Go'' authority. No other person is authorized to 
     preempt or otherwise interfere with that authority. So when 
     the contracting officer said ``No'' on the Sun contract, why 
     didn't that mean ``No''? Why didn't the story end there?
       One of Mr. Williams' directors suggested that the 
     ``Impasse'' in the negotiations was caused by the 
     intimidation of the contracting officer by IG auditors. On 
     September 5, 2006, in response to that complaint, Mr. 
     Williams lodged a quasi-formal complaint with the IG, 
     alleging that the IG auditors had made threatening statements 
     to GSA contracting officers.
       Mr. Williams' complaint of IG auditor intimidation came 
     just five days after the contracting officer was removed and 
     four days before the new contract was signed. Mr. Williams 
     also passed these allegations to Administrator Doan.
       Mr. Williams' allegations of IG auditor intimidation were 
     examined in detail by the GSA IG, by my staff, and by the 
     U.S. Postal Service IG. There is not one shred of evidence to 
     support those allegations. They appear to have been bogus 
     allegations. A senior official in the IG's office suggested 
     that Mr. Williams' allegations regarding IG auditor 
     intimidation were ``a smokescreen for things going on in the 
     agency itself.''
       After forcing the contracting officer to step down, GSA 
     management appointed a new one. It took her just nine days to 
     negotiate a final deal with Sun. In interviews, the new 
     contracting officer claimed that she did not need to talk to 
     the IG auditors who had years of knowledge on the contract. 
     She said that she could solve the impasse in the negotiations 
     by listening to the contractor. Many of the provisions she 
     accepted were ones steadfastly opposed by the previous 
     contracting officer--the very same terms that led to the so-
     called ``impasse'' and the removal of the previous 
     contracting officer. She even admitted during questioning 
     that she did not fully understand key provisions in the 
     contract she signed. She admitted making ``big oversights'' 
     in some of the contract terms. I found these revelations very 
     disturbing. They raised questions about the motives behind 
     her appointment. She later received a $1,400 cash award for 
     signing off on the Sun contract.
       Following my staff's interview of the new contracting 
     officer, I had grave concerns about the new contract. Was Sun 
     continuing to cheat on government discounts mandated by the 
     price reduction clause--as feared by the IG auditors? I 
     thought I would be remiss in not asking more questions. 
     Consequently, on June 5, 2007, I asked the IG to conduct an 
     audit of the new contract. Since Sun claimed it was such a 
     ``good deal for America,'' I felt sure the company would rush 
     to cooperate. How wrong I was! For three months straight, Sun 
     stonewalled and procrastinated. Sun withheld information. Sun 
     fought the audit tooth and nail every step of the way. They 
     even lashed out at the GSA IG. Then suddenly and 
     unexpectedly, on September 13, 2008, Sun canceled the 
     contract. What happened? Why would Sun cancel a contract it 
     had fought so hard to get? Was Sun trying to avoid the audit? 
     Did Sun have something to hide? Something about this just 
     does not smell right.
       Mr. Chairman, Mr. Williams was the Commissioner of GSA's 
     Federal Acquisition Service at the time of the Sun/GSA 
     contract debacle. That made him the top dog overseeing and 
     managing the procurement of

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     computer equipment and services for the whole government. The 
     Sun Microsystems contract was being re-negotiated right under 
     his nose. He was the top official accountable for that 
     contract. When he was informed in August 2006 by IG auditors 
     about the alleged fraud on the Sun contract and the DOJ 
     referral decision, he should have brought the Sun contract 
     negotiations to a screeching halt. He should have called for 
     a comprehensive, independent review and/or audit and 
     assessment of Sun's corrective action plan. He should have 
     carefully weighed the gravity of the fraud allegations before 
     proceeding any further.
       Mr. Chairman, instead of heeding all the IG's warning 
     signals, Mr. Williams pushed the throttle to the firewall at 
     Administrator Doan's direction. The record shows pressure was 
     put on the contracting officer to sign a potentially bad 
     contract. When the contracting officer refused to bend under 
     pressure, Mr. Williams involved himself directly in the 
     contracting process. He participated in the decision to 
     remove that contracting officer from the Sun contract 
     negotiations. His actions eliminated the last standing 
     barrier to contract approval. In doing these things, he may 
     have improperly interfered in the contracting process and 
     hurt the taxpayers.
       The alleged contract violations and alleged fraud on the 
     Sun contract, which supposedly occurred over a long period of 
     time, may have wasted tens of millions of dollars in taxpayer 
     money. Mr. Chairman, there must be more accountability in the 
     government contracting process. Elevating those who have been 
     detrimental to this process would certainly be anti-
     accountability and anti-taxpayer. That would clearly send the 
     wrong message to the whole contracting community.
       For these reasons, I intend to oppose the nomination of Mr. 
     Williams to be the next Administrator at GSA, and would 
     expect your Committee to do so, too.
       Your careful consideration of my concerns would be 
     appreciated.
           Sincerely,
                                              Charles E. Grassley,
     Ranking Member.

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