Changes Spurred Buying, Abuses

On Sept. 5, Doan met with senior officials from the GSA's inspector general's office, who told her that Sun was "using defective and inaccurate information to cheat the government out of millions of dollars," Grassley recounted in his letter.

'I'm Dumbfounded'

As it negotiated with the GSA, Sun hired the Washington Management Group, a consulting firm that employs former senior GSA officials, the Waxman memo said. The firm operates the Coalition for Government Procurement, an association of GSA contractors that includes Sun.

E-mails show that Doan communicated with Larry Allen, a vice president of the coalition and a WMG executive, during the negotiations.

"I understand that new life has been breathed into the Sun situation," Allen wrote in a Sept. 7 e-mail to Doan. "Thanks for any help you provided."

Minutes later, Doan responded: "Thank you for alerting me. I feel confident that with Jim Williams' involvement, an agreement will be reached to everyone's satisfaction."

The following day, Budd, the new contracting officer, signed off on the Sun contract.

Budd later received a $1,400 cash bonus "for stepping in to negotiate a highly sensitive and political contract with a strategically important vendor after impasse occurred," according to the Waxman memo.

Grassley and Waxman later criticized Budd for her role.

"She allegedly agreed to terms that could cost the government tens of millions in lost savings over the next three years," Grassley wrote in one of his letters to GSA.

Budd defended herself, saying she made the decision without any pressure from GSA leaders, in an e-mail released at a March 28 hearing by Waxman's committee. It was read by Rep. Davis. "I'm astonished! I'm dumbfounded! This is destroying my well deserved good name and reputation," Budd wrote. "I know beyond a shadow of a doubt that every action I took was in the best interest of the Government and the American taxpayer -- of which I am one!"

In a report prepared by the Republican staff of the House Oversight and Government Reform Committee, investigators questioned Waxman's findings and defended Doan and the Sun contract. "There is no evidence the Administrator acted improperly with respect to the Sun Microsystems contract," the report said, adding that "many of the issues" had been resolved before Budd took over the contract.

Doan testified before Waxman's committee that she played no role in the Sun negotiations or in the assignment of contracting officers. She said Williams, her aide, spoke of the fraud allegations "in what seemed to me a, sort of, lackadaisical manner" and told her "nothing was there."

Doan also told Grassley, "I have never met nor had any discussions with Sun Microsystems managers" and that she "had no knowledge of the negotiations or the basis for decisions made regarding this contract."

Waxman responded that Doan's statements "appear to be misleading" based on the committee's review of the e-mails of her multiple contacts with Larry Allen.

Allen told The Post that he approached Doan in his capacity as vice president of his trade group, not as an executive of the consulting firm. He said the trade group normally does not get involved individual contacts, but it did so in this case because he thought Sun was being treated unfairly.

Doan told Waxman she believed she did the right thing.

"What I was interested in is making sure that we were getting the very best value for the American taxpayer," she testified.

On April 12, the U.S. attorney in the Eastern District of Arkansas filed suit against Sun, alleging that the company violated the False Claims Act when it "made false statements to the government about its commercial sales practices and the discounts it offers to its commercial customers."

In a statement, the company declined to comment. "The pending court case is the appropriate forum to address these issues," it said.

Researcher Alice Crites contributed to this report.