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Vendredi, 02 Septembre 2011 12:00

Pentagon Is Undisputed U.S. Champ of No-Bid Contracts

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Pentagon Is Undisputed U.S. Champ of No-Bid Contracts
It was time for a change, Pentagon officials thought. In 2010, they had just wrested control of a $1 billion contract to train Afghan policemen from the Pentagon, and they thought the work should go to Xe Services, the infamous private security firm formerly known as Blackwater.

The deal, an umbrella-style contract, would come from an unlikely, obscure Army bureau called the Counter Narcoterrorism Technology Program Office, or CNTPO, that brings new tech to foreign allies’ counternarcotics efforts.

One problem: The new task slotted into the CNTPO contract —  known as an “indefinite delivery, indefinite quantity” contract — had nothing to do with counternarcotics or technology. Afghan police needed training in basic skills like shooting straight and controlling riots.

But the CNTPO contract, first awarded in 2005, was already held by Blackwater and four other companies. Using it meant the Pentagon could slip Blackwater into the training job — and avoid holding a new full-and-open competition.

Another problem: Rival security firm DynCorp already held the existing training contract, which was run out of the State Department, not CNTPO or any other Pentagon arm. DynCorp didn’t want to give up its lucrative training business. But since DynCorp wasn’t among the five companies that held the CNTPO award, it couldn’t even compete for the work it was already performing.

The would-be noncompetitive Blackwater contract fits into a larger pattern of Pentagon contracting identified by the Center for Public Integrity. Although the Pentagon isn’t the only agency to face criticism for noncompetitive contracting, its large budget and wartime responsibilities have made it responsible for an outsized portion of such spending.

Over the past 10 years, the Pentagon has “competed” only about 60 percent of its total contract dollars. By contrast, the State Department “competed” 75 percent of its contract dollars in fiscal year 2010, while the Energy Department “competed” almost 94 percent of its contract dollars.

Another unique Pentagon attribute: The Blackwater-DynCorp fiasco shows that even when the Pentagon tries to limit competition over its contracts, it recognizes that the most qualified companies are the ones it excludes.

Even government bureaus accused of being hotbeds of waste do better than the Pentagon. The U.S. Agency for International Development, which faced heavy criticism in the early days of the Afghanistan conflict for handing out sole-source contracts, competed almost 80 percent of its total contract dollars in fiscal year 2010. The Department of Homeland Security, much derided for a series of disastrous contracts in the wake of Hurricane Katrina, competed almost 76 percent of its contract dollars in 2010.

The Pentagon’s police-training contract came under scrutiny when an investigation by the Senate Armed Services Committee revealed that an employee of a Blackwater subsidiary called Paravant, which was working on another Afghanistan training contract, used the name of aSouth Park character, Eric Cartman, to sign out for 200 weapons. Paravant employees used those weapons for their personal use, violating U.S. Central Command rules — and the weapons were supposed to go to precisely the people the CNTPO contract sought to train: Afghan cops. Sen. Carl Levin (D-Michigan), the committee’s chairman back then, wrote to then-Defense Secretary Robert Gates to protest Blackwater getting the job.

In parallel with the Senate investigation, DynCorp, the incumbent on the Afghan police-training contract, protested the Blackwater award to the Government Accountability Office. The office sided with DynCorp. The CNTPO contract, the GAO said, never should have included any police training that wasn’t directly related to counteract narcoterrorism.

Although the Army argued there was a “nexus” between Afghan policing and counter-narcoterrorism, the GAO just rolled its eyes. ”The Army admits that the Ministry of the Interior and Afghan National Police are primarily involved in counterinsurgency activities,” the GAO decided. Ultimately, in December 2010, the Army announced DynCorp would keep the contractafter holding a competition for it.

For its part, the Pentagon defends its overall contracting record. “The [fiscal year 2010] competition rate of 61.7 percent is consistent with the [Defense Department's] 10-year-average competition rate of 61.8 percent,” wrote Cheryl Irwin, a Pentagon spokeswoman, in response to questions from the Center for Public Integrity about the Pentagon’s competition-procurement rates. As part of the Pentagon’s recent push to curb no-bid contracting, the various Defense Department buying agencies are supposed to come up with plans to improve competition somewhere between 2 percent and 10 percent.

But according to data reviewed by the Center for Public Integrity’s iWatch News, the Pentagon has made no substantive gains in increasing the amount of contracts competed.

In fact, it’s actually gotten worse. Competed dollars dropped from 63.5 percent of contracts awarded in 2009 to 61.7 percent in 2010 — and just 55 percent in the first half of 2011.

When it comes to real competition — meaning having companies bid on specific goods and services — even those numbers may be misleading, because the data excludes certain types of contracts. Large umbrella contracts, like the CNTPO indefinite delivery–indefinite quantity contracts, are initially awarded competitively. But they typically cover many years, and many different types of work. Once companies win them, they’re part of an exclusive club that doesn’t have to face full and open competition.

A recent report by the Defense Science Board, an independent advisory committee to the Pentagon, found widespread problems with such service contracts.  ”Approximately 66 percent of services were procured using indefinite delivery–indefinite quantity (IDIQ) contracts in 2010, something that was never contemplated when IDIQs were first proposed,” the report stated.

For Charles Tiefer, a commissioner on the Wartime Contracting Commission, the GAO decision on the police-training contract was “a major embarrassment to Defense.” As Tiefer describes it, the Defense Department went from using a contract that explicitly excluded DynCorp to holding a full and open competition, which DynCorp subsequently won.

In other words, Tiefer said, after first excluding DynCorp from the competition, “the military could not find in all the world a contractor willing to do the job better than DynCorp.”

Photo: U.S. Army


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