Metro: "Blank Check"

Discussion on the District's Spending and Contracting Practices

Congressional and city officials called Monday for investigations into how the District spends hundreds of millions of dollars annually in violation of laws and policies designed to avoid waste and fraud, Washington Post staff writers Dan Keating and David S. Fallis report in Tuesday's article U.S., City Officials Demand Spending Probe (Post, Nov. 29).

Fallis and Keating were online Tuesday, Nov. 29, at noon ET to field your questions and comments.

Read the Series "Blank Check":

District Dodges Spending Laws (Post, Nov. 27)

Lavish Spending, Little Reward (Post, Nov. 28)

Related Article: Funds in Health Contract Shifted to Pay Consultants (Post, Nov. 27)

Graphics:

Document Trail | Steady Flow of Funding | Spending the City's Money

The transcript follows.

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Herndon, Va.: Thank you for writing this. It's scary to think it might only be the tip of the iceberg.

The obvious question now is how do we follow up? Where is the public outcry? If I were a D.C. taxpayer, I would want my money back, and I would to see people going to jail. How do we fix the problems?

Dan Keating and David S. Fallis: As people said in the stories Sunday, Monday and today, the system has to be set up so people can do their jobs without breaking the rules. Once you do that, you can hold people responsible for breaking the rules.

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Washington, D.C.: As a D.C. taxpayer, I am concerned that there is no accountability for contractor spending and repercussions for wrong doing in the District of Columbia. What are the repercussions for contractors that...misrepresent themselves then, use funds inappropriately and lastly, make no arrangements to return the money? Are they punished? I'm always confused...The Post writes about the wrong-doings but, does not report about the punishment...i.e. yesterday's article on Archie Prioleau.

washingtonpost.com: Lavish Spending, Little Reward (Post, Nov. 28)

Dan Keating and David S. Fallis: All we've done is write a newspaper article. We're not trying to punish anyone. Unfortunately, the process moves slowly.

DC Council and officials in Congress said yesterday that they intend to investigate, but don't expect anything to happen quickly.

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Washington, D.C.: As a federal contract specialist, it really makes me wonder what level of separation there is between the person making the contract award decisions and the political hacks who would steer fat contracts to their cronies. Do District procurement officials have any form of independence such that they would not suffer any repercussions if they disagreed with the whims of the political officials who run the bureaucracy? Or is this a case of the CO totally screwing up the award decision?

Dan Keating and David S. Fallis: That's a very important issue that we tried to address in writing this story. The city has been working to reform contracting over the past 15 months, and the reform priorities have been:

1) speed up and streamline the issuance of contracts

2) get more contracts to local and minority firms

3) find ways to keep program agencies happy rather than putting them through bureaucratic hoops.

They also said they want to make program agencies take responsibility for making requests in a timely fashion.

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Arlington, Va.: Does anyone really believe any government whether it be local, state, or federal, or international is capable of spending money appropriately?

Greed is a nasty word, but it is the perfect description for our government of by and for the people.

Dan Keating and David S. Fallis: Private business has the discipline of the marketplace. But government operates in a different way. So it uses rules and regulations to try to make sure its money isn't wasted.

It also has rules about transparency of where government money goes. We found in the course of this project that it was very difficult to get records -- despite efforts by many good DC employees -- either because they don't exist or aren't kept or maybe never existed. Without any way of seeing how the money was spent, you just have to trust them.

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What's Your Contracting Experience?: Have you ever actually working in a contracting office? Government contracting is a thankless, underpaid job. You have to be a mini-lawyer, mini-HR Specialist, and a crying blanket to your 'customers'. I have worked in Government contracting over fifteen years and there does come a point where all you can do is throw your arms up in the air and do whatever you can do to process the requisitions. As long as upper management looks good in the eyes of the hands that feeds them, we in the lower ranks, have to do whatever we can.

Dan Keating and David S. Fallis: Thanks for your insights.

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Capitol Hill resident: I find it laughable to see all the city pols lining up to lambast the current administration over the horrible spending practices in D.C. city government. Are we to believe that council members are not accountable for city spending? I guess Ken Lay didn't know about the bookkeeping practices at Enron, either.

Home rule? Please.

Dan Keating and David S. Fallis: The DC Auditor and DC Inspector General have released many, many reports about spending money without contracts, too many no-bid contracts, paying cost overruns, problems with competition, and more. It's a steady drumbeat.

But people are always amazed when the next one comes up.

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Washington, D.C.: The response of the Mayor's Office that "the actions of a few individuals do not tarnish the overall progress the city is making" really angers me. If nearly 10 percent of the city budget is being spent through "direct vouchers" this is a systemic problem that should have been addressed by the Mayor and the Council a long time ago. D.C. residents are not going to buy the few bad apples excuse, this is a city full of us federal accountants, contract specialists, budget analysts, and private auditors. Are there any signs that someone is going to lose his/her job over this embarrassment?

Dan Keating and David S. Fallis: Thanks for the comment.

We don't know what will happen. We'll keep writing about it.

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Washington, D.C.: Does it seem to you that District contracting has improved at all during the past year, with a deputy mayor doing double duty as interim Chief Procurement Officer?

Dan Keating and David S. Fallis: In interviews, Deputy Mayor Herb Tillery, who has been running the Office of Contracting and Procurement for more than a year, said he is working hard on reform. He also acknowledged the inherent difficult of being in an interim position and not being a procurement specialist because it is a very technical field.

The District has a rule against having "acting" department heads for more than six months, but apparently there is no rule against "interim." There has not been any public nomination for a new head of Office of Contracting and Procurement.

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Southeast Washington, D.C.: Just wanted to say thanks for "riding herd" on city officials. It's really too bad we can't trust them to police themselves. These stories represent what is right and good about modern newspaper reporting. Now could you please point me in the direction of the D.C. taxpayer's revolt?

Dan Keating and David S. Fallis: Thank you very much. It really is important to us that the real point of this is services for city people, not just whether rules were followed.

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Washington, D.C.: Many contractors working for D.C. are basically staff augmentation, meaning that they are not hired for a specific task (like hiring a contractor to paint your house) but rather show up to work everyday and do what they are told by their managers just like full-time employees.

Within certain groups, especially in technology (IT) areas, the number of contractors exceeds FTE's by a wide margin. This in part is caused by the inability of DC to offer competitive salaries for these workers as compared to non-government positions.

I hope you can appreciate that having the contractor staff constantly changing (as would happen if sole source contracts were not used to retain the same people) would cause chaos and be very counter-productive for the District. A large part of getting things done in D.C. is the body of knowledge that someone gains over time and experience; the ramp-up period where someone is not as productive as an exiting staffer can be several months.

While I'm not saying that D.C. should overpay for contractors, to throw every contract position open for bidding (and presumably awarded to the lowest bidder) would lead to a real decline in the quality of services offered and would throw many projects into disarray.

And yes, I am such a contractor so what I have written is self-serving but I also know it to be true.

Dan Keating and David S. Fallis: That's an interesting perspective. The Control Board did away with the District's history of "personal service contracts," which were consultant employees. As you note, they've returned to some extent, particularly in technical fields.

But since they're still outlawed, the District has to find "creative" ways to do it, as Suzanne Peck said in Sunday's article.

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Washington, D.C.: Thank you for shining a light. The fact is, there are plenty of organizations in the world that wouldn't be around if not for unfettered government largesse. Some names: General Motors, Boeing, Chrysler, CACI, DynCorp-CSC. When is the public going to realize that outsourced government in all of its forms is more of a jobs program than government itself?

Dan Keating and David S. Fallis: Interesting. As we said, it's very important that things be done in the light of day. If the government chooses to spend money and justifies it in public, that's one thing. When things are hidden, that's different. When the Boeing plane lease became public, things changed. That's why we tried to let people know what's going on in D.C.

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Dan Keating and David S. Fallis: FYI -- This was posted to the Post's workplace discussion this morning:

"D.C.: Hello. The articles in the Post Sunday and Monday on the contracting fiasco are real. But the workers in the contracting office fear telling their bosses because they will get fired since their bosses did not want to make the Mayor mad. Any advice for those in the contracting giving out business?"

We're not advice columnists, but we hope these people find a way to get the truth out.

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Gainesville, Fla.: Do you really expect anything less from a city that keeps returning Marion Barry to public office? DC voters are far too forgiving.

Dan Keating and David S. Fallis: We're just posting some of the opinions coming in. Thanks for contributing.

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Ellicott City, Md.: Great series. Having done Gov't contracting, I wonder how much of this is a reflection of complicated, over-restrictive contracting rules that force D.C. officials to "end run" the process rather than compete? For example, rules that require contracts to be reported to the Council for 30 days or special "DC only" contractor requirements.

Dan Keating and David S. Fallis: Contracts for more than 1 year or more than $1 million have to go to the Council, and they almost always sail through in five days. The "DC Only" is rare, though the District is buying more through it's Supply Schedule that is DC businesses.

Contracting officials told us that DC's rules, especially the open rules on sole-source no-bid contracts, make it easy to do things rather than tie them up.

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Washington, D.C.: My comment is there are definitely issues going on with District Officials lack of concern for accountability or ethics. It is widespread and includes independent authorities such as the Districts Water & Sewer Authority. The Authorities practices are wasteful and abusive and their relative independent status affords them little oversight. Contracting is a major element of these abuses, but they also include cronyism and Human Resource abuses. My question is could you expand your investigation to include independent authorities and general practices of the Government, to include Human Resource accountability. I believe that some DC Officials have been allowed to not only circumvent laws governing contracting, I also believe that they have been allowed to circumvent laws governing Human Resources, allowing Officials to be able to employ cronies that perpetuates their ability to bypass other laws. I know this definitely applies to the Districts of Columbia Water Authority. That agency is on the verge of corruption. You can easily identify these agency because they are the same agency that do not deal with internal complaints well. They prefer to have those around them that do not or can not complain; many reframing from complaining out of retaliation concerns or because of their AT-Will designations. I have reported my experiences all the way up to the Executive level and they all evade the problem. They in fact appear to be aiding and abetting the situation, it's terrible.

Dan Keating and David S. Fallis: We didn't deal with Water and Sewer Authority for our story. Thanks for the suggestion.

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Alexandria, Va.: There are two sets of rules in contracting...

As an government contractor (on my lunch break), we cannot bring donuts to a meeting with the government's representatives.

Meanwhile Duke Cunningham lives on a yacht provided by a contracting firm....

Dan Keating and David S. Fallis: Cunningham pleaded guilty, so it's not like he got away with it.

But, donuts?

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Vienna, Va.: I guess this'll put the kibosh on D.C.'s demand for a commuter tax, huh?

Dan Keating and David S. Fallis: The courts already seemed to have killed it. We doubt our stories would have any effect on that.

But Congressional officials say they need to maintain confidence in DC's operations, so they want to follow up on our stories.

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Maryland: Isn't the real focus of improvements to be made in the procurement office and not the CFO office? I agree with the CFO that people need medicine and kids need books - otherwise The Post will write an even worse story about how red tape preventing people from getting better or kids from reading ... which is worse ...?

Dan Keating and David S. Fallis: That's the argument the CFO made and it makes sense. Remember that the CFO has his own procurement office runs many agencies, such as Lottery, where some of the contracting problems arose.

It's hard to fix a moving car, and that's the challenge the District faces. In response to our findings, CFO is now monitoring "direct voucher" usage much more closely in hopes of eliminating it. But Gandhi's people said fixing it means getting improvements upstream.

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Washington, D.C.: Are you going to investigate further any possible personal or business connections between the contractors and city officials?

I am saddened by the fact that Williams was supposed to be the clean-house mayor and this went on. I'm saddened further by the thought that there seems to be a desire to elect a less reform-minded mayor after Williams (i.e. a mayor more concerned with stopping gentrification rather than graft, etc.).

Dan Keating and David S. Fallis: We investigated to the extent that we can using public records and interviews.

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D.C. Employee: My personal experience is that I provided services to several D.C. agencies through a national consulting firm at well over $100 dollars per hour. I was recruited to an onsite contract position with D.C. through DBTS which saved the government approximately 30 percent per hour. After a few months with DBTS, I converted to a full time government employee again costing the tax payers less. I think your story failed to look at the details.

Dan Keating and David S. Fallis: Interesting perspective. It's good that rates could keep going down. I wonder what DC would be paying if there was competition?

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Washington, D.C.: So, I'm guessing there wasn't any evidence of bribery or kickbacks to report yet? Nobody broke out in the "Mike Wallace Sweat" when you were interviewing for this story? How long until the other shoe drops? The Duke Cunningham story and others like it make me wonder how these things ever get ferreted out.

Dan Keating and David S. Fallis: You're right that the reporting process for newspapers is very different -- less confrontational, less like the Inquisition.

We don't try to sit someone down and sweat the truth out of them. We like to have a dialogue to get people's perspective.

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Washington, D.C.: So is what OCTO is doing with DBTS (which you highlighted in your article) legal or not?

Suzanne certainly seems to think so. DBTS is adhering to DC's supply schedule and is providing workers that satisfy the requirements. Does OCTO have to open these contracts up for bidding or not? Seems like a pretty straightforward question yet your article and Suzanne disagree about this fundamental issue.

Dan Keating and David S. Fallis: The article makes clear that DC's rules for no-bid sole-source contracts lets the city give an unlimited amount to anyone.

The only question of breaking the rules is whether the DC Council had to be notified when it was more than $1 million in a year. The contracting office said no approval necessary as long as each contract is less than $1 million, but Council members say that any time an agency is spending $1 million with a vendor in a 12-month period, there should be notice and approval.

I just want to mention about DC Supply Schedule. A supply schedule contract above the small-purchase threshold requires at least three bids off the schedule. A sole source using the loophole doesn't even require that -- it can just go to anyone regardless of whether it's the best price.

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Washington, D.C.: I have experience contracting with the District of Columbia Government. I think you article did not concentrate enough on the inappropriate contracting practices in the Office of the Chief Technology Officer. That office is filled with poor practice and manipulation. I have contracted with them before and have been manipulated into hiring personnel that they want for other projects in order to be considered for projects within the agency. I have also been used as a pass through for the same purposes.

I have been witness to Sandy Lazar manipulating his position within the agency in order to direct work to companies he wants on his projects.

Honestly there is not open competition within OCTO. If you are not a Suzanne Peck approved contractor you will not get any work. Do not get me wrong, the company I formally worked for got a lot of work from OCTO but the company's management got fed up and decided to reduce its direct contracting with OCTO and decided to pursue business with other agencies.

What makes it works is that Suzanne Peck is untouchable and she knows it. She contributes so much to the Mayor's previous campaigns that she is above reproach.

Dan Keating and David S. Fallis: We don't have any comment on this.

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Washington, D.C.: Given my past experience at a D.C. non-profit with a contract under the Department of Housing and Community Development (DHCD), I can see how complicated this issue is with no one in particular to place all the blame on. Although I did feel our project managers provided efficient oversight over our spending and budget, I never felt comfortable with the cozy relationship several well-connected "Community Development Corporations (CDC)" established with department officials, often translating in the largest grant awards. I wouldn't have too much of a problem with it if it translated into real results. Often these grants were not only rewarded improperly due to personal relationships (as in the case of one former Director of DHCD now head of a CDC which is one of the biggest grant recipients from his former agency year after year), but result in few improvements at the community level. Numbers of people assisted through services are very easy to forge if that is the only deliverable.

Dan Keating and David S. Fallis: We didn't look at CDC's -- they operate at the public-private edge. On the one hand, there's not going to be development if developers don't make money. On the other hand, people are sometimes uncomfortable with government programs that help people make money.

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Washington, D.C.: It is sad that the City contracting appears to be in the same shape as when the Control Board took over--albeit with more money. Delivering government services is critical and managers are faced with getting those services to those in need in a timely manner. Following procurement rules can take time. The key I believe is in planning--something the District does not do. The case of the old convention center turned into a parking lot seems to demonstrate this better than anything else. The District has known for ten years that this property would be available and still can't get the consensus to build. The District is foregoing millions in property taxes that a fully-developed site would bring because of poor planning.

Dan Keating and David S. Fallis: Foreward planning is definitely part of procurement.

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Washington, D.C.: I believe the article leaves out several details that are very relevant such as the creation of the DC Supply Schedule. The DC Supply Schedule is similar in scope to the Federal Government's GSA Schedule. It allows Government Agencies to order services and equipment at a pre-negotiated rate. The DC Supply Schedule does the same thing - it allows agencies to order services from contractors at pre-negotiated rates. So in essence there is a competitive bidding process that has been in effect....

Dan Keating and David S. Fallis: As we wrote a minute ago, a supply schedule procurement requires comparing multiple choices off the schedule, but the loophole for sole-source contracts lets buyers skip the supply schedule purchase procedures and just give the contract out regardless of whether the schedule price is best.

also, GSA has said that supply schedule is a bad way to do large consulting contracts because you almost always save money by competing them. buying pencils is a different matter.

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Washington, D.C.: It would seem the requirement that items in excess of one million dollars that are voted on by the city legislature, serve the function of creating a space below the radar of scrutiny. Simply put, are the practices a violation of any current law, and how much money is involved, over what period of time?

Dan Keating and David S. Fallis: As we said, there is disagreement between agencies and the council over a series of contracts that adds up to more than $1 million.

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Washington, D.C: The office of the chief technology officer (OCTO)'s procurement process is dysfunctional for sure.

I remember once trying to order a Dell server, providing a quote from Dell and being told from procurement that I had to get 2 more bids (we had an existing negotiated discount with Dell). I've had other similar things happen with fairly inexpensive items (less than $10,000) where getting additional quotes just didn't make sense (and interestingly the burden for getting these quotes falls back on the requestor - shouldn't that be the procurement dept's job?)

Then DC goes off and gives several million to some yahoo and doesn't watch or care what he does with it. There is definitely a problem with prioritizing effort/resources to maximize savings.

Dan Keating and David S. Fallis: That amount is below the small-purchase authority that would require competition, so it's hard to tell what was happening in that case.

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Washington, D.C.: While the GSA has stated that the GSA Supply Schedule is a bad way of doing business for large scale government contracting would you agree that 146 contracts worth $13 million over three years isn't large scale government contracting?

Dan Keating and David S. Fallis: Thanks for your input.

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Washington, D.C.: I understand that you might not want to name names in today's chat, but I hope The Post will soon publish details on all substantiated cases of elected or other public officials receiving unethical rewards for certain contract awards.

On another note, it's important that you brought attention to practices at the Maternal and Family Health Administration, which might not get its money's worth on any single dollar that it spends. A city with such a high infant mortality rate and so many people underserved by health care, it is a crime to have such waste in that department.

Dan Keating and David S. Fallis: thanks for your comment.

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Washington, D.C.: people seem to have short memories - to say that things have regressed to the barry era is really wrong consider THEN - no mayor credibility, no respect on hill, tax revenue uncollected, junk bond status - no respect on wall street, trash never picked up

NOW - mayor and district get respect on hill, budget surplus, A+ bond rating, home values higher, MCI Center, new conv center - city runs better

how can people even compare?

Dan Keating and David S. Fallis: thanks.

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Dan Keating and David S. Fallis: Thank you very much for your interest in the stories. It was great to hear from such different perspectives. We're always eager to learn more. You can reach us at fallisd@washpost.com and keatingd@washpost.com.

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