FDA Takes End Run to Award Contract to PR Firm

By Robert O'Harrow Jr.
Washington Post Staff Writer
Thursday, October 2, 2008

The U.S. Food and Drug Administration had an image problem. For months last year the agency had been pummeled by Congress for poor inspections of tainted vegetables, drugs and other products.

FDA leaders decided to hire a contractor for a public relations campaign that would "create and foster a lasting positive public image of the agency for the American public," according to agency documents.

A competition, as prescribed by government policy, was not held to get the lowest bid for the $300,000 contract. Instead, FDA officials came up with a plan to ensure the work would go to a Washington public relations firm with ties to the FDA official arranging the deal, according to an examination by The Washington Post.

The plan used a circuitous route around the standard government contracting procedures. The contract was awarded in July to Alaska Newspapers Inc., a firm owned by an Alaska Native corporation that does not have to compete for federal work because it qualifies for special set-asides. The idea was for ANI to hand over the work to Qorvis Communications, the Washington firm, documents show.

After being made aware of The Post's findings, FDA deputy commissioner John Dyer said this week that he had suspended the contract and ordered an independent investigation.

"Whatever the findings are on this one contract, the FDA has full confidence in the integrity of its contracting procedures as verified by independent third-party reviews conducted several times a year," Dyer said in a statement Monday.

ANI and its parent company, Calista Corp., did not return repeated phone calls seeking comment.

The story behind the FDA's public relations deal, drawn from interviews and dozens of e-mails obtained by The Post, offers insight into how contract competition requirements designed to get the best deals for taxpayers have often been subverted in recent years for the sake of convenience or to serve narrow interests, according to a congressional study and contracting specialists.

With unusual candor, people involved in the FDA deal discussed the fact that ANI was brought in so the FDA could work with Qorvis, e-mails show.

While the deal was being formulated last October, James Dunn, a private consultant who had dealings with ANI, sent the following e-mail to a Qorvis executive, who forwarded it to an FDA official: "ANI will gladly serve as a prime for Qorvis on the FDA deal, knowing that the agency would intend to direct them to you as a subcontractor to perform all the work."

Steven Schooner, co-director of the government procurement law program at George Washington University, said he has rarely seen such a detailed example of officials and contractors working to avoid competition.

"The story line is as bad as anything I've ever heard," he said. "It's not transparent. It's not competitive. It's not arm's length."

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