Careless Contracting

Saturday, November 25, 2006

THE DEPARTMENT of Homeland Security is an MBA's nightmare. When Congress cobbled DHS together in 2002, it took apart and reassembled elements from disparate federal agencies into an uneasy consolidation, too big and too varied, some say, for even the department's tireless head, Michael Chertoff, to adequately control. Instead of synergy, a fair measure of incompetence followed, including, The Post reported Wednesday, embarrassingly poor oversight of the billions of dollars the department has paid to private


The Post's Robert O'Harrow Jr. and Scott Higham obtained an internal review of the department's Office of Procurement Operations, one of many agencies that handles contracts within the department. According to the review, which was drafted by outside specialists on government contracting, almost none of the contract files examined met standards of quality or even completeness. The documentation for 33 of 72 contracts the investigators sought to evaluate could not even be located, which makes you wonder how DHS ensures that contractors aren't wasting government money.

Further, many of the files that were available were "not substantive" and offered "little evidence of fair and reasonable pricing or competition," among other problems, the investigators found. An alarming number were "seriously inadequate," with "major policy, regulatory or legal issues." Poor contract management, the report concluded, has led to "the inability to obtain quality goods and services on time and at a fair price." These contracts date from fiscal 2005, during which DHS distributed nearly $17.5 billion to contractors and the federal government ran a deficit of $318 billion.

The story isn't as bad these days, a department spokesman says. The fact that Homeland Security hired consultants to review its contracting indicates that managers want to improve the process, and the spokesman says the procurement office is working to implement each of the report's recommendations, which officials received in March. But according to the department's inspector general, poor contract management persists. Money and security alike are put at risk.

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