Arrest of Procurement Policy Chief Could Undercut Contracting-Out Agenda

By Stephen Barr
Friday, September 30, 2005

The arrest of the Bush administration's procurement policy chief has rocked the federal contracting community and raised questions about whether the White House can quickly recruit a replacement and maintain its "competitive sourcing" initiative.

David H. Safavian , 38, administrator of the federal procurement office at the Office of Management and Budget, was arrested Sept. 19 after the FBI filed a complaint accusing him of lying and obstructing a criminal investigation into the dealings of a Washington lobbyist. Safavian's attorney has said he will vigorously contest the charges.

The White House has started a search to find a replacement for Safavian, who has resigned. In the interim, Robert A. Burton , a career OMB official, is managing the office.

Alex Conant , an OMB spokesman, said Safavian's departure "will not impact OMB's competitive sourcing initiatives. Our priorities are the same now as they were two weeks ago."

But officials elsewhere in the administration predicted that Safavian's arrest would undercut OMB's contracting-out agenda, known as A-76, and make it easier for Bush critics to score points on Capitol Hill.

This week, Rep. Chris Van Hollen (D-Md.), who has sponsored annual amendments to force a rewrite of the administration's A-76 rules, called on the Government Accountability Office to probe the awarding of no-bid contracts for hurricane relief and recovery. He cited Safavian's arrest and asked for an investigation "of all the matters where Mr. Safavian became directly or indirectly involved."

The American Federation of Government Employees, which has lobbied against the competitive sourcing agenda because it threatens federal jobs, has stepped up its campaign and accused OMB of unwarranted intervention in contracting decisions at two agencies.

John Gage , the union president, said the arrest "provides this administration with an opportunity to rethink its misguided wholesale privatization policy."

Conant said OMB "routinely works with agencies to make competitive sourcing successful. By working with agencies receiving bids, OMB helps save taxpayer dollars and improve results."

The competitive sourcing initiative has proved controversial since its launch in 2001. OMB estimated last year that the project would create savings of $1.4 billion over five years, but AFGE argues that the savings are illusory.

Safavian's arrest represents another blow to the federal contracting community, which saw Darleen A. Druyun , a former top Air Force acquisition official, testify in court that she had favored Boeing Co. in contract decisions. Questions also have been raised about the management of contracts at the General Services Administration, Defense Department and Department of Homeland Security over the last two years.

"Obviously, it is dispiriting for the [OMB] staff . . . and the much harder issue is that it is dispiriting for the acquisition community," said Steven L. Schooner , a George Washington University professor.

Schooner said he sees the federal acquisition workforce as "tired and overworked" and buffeted by contracting controversies in Iraq and with Hurricane Katrina. "Safavian was supposed to be the point person on making Katrina go well," Schooner said. "I think it is a dark moment."


Barbara Gales will retire today after a 39-year career at the Small Business Administration, where she was chief of the Payroll and Systems Branch for many years.

Talk Shows

Dave Thomas , chief of the FBI's Computer Intrusion Section, will be the guest on "FEDtalk" at 11 a.m. today on and WFED radio (1050 AM).

Nuala O'Connor Kelly , former chief privacy officer at the Department of Homeland Security, will be the guest on "The IBM Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).

"Are You Still Glad to Be a Federal Employee?" will be the topic of discussion on the Imagene B. Stewart call-in program at 8 a.m. Sunday on WOL radio (1450 AM).

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