Sam Shimomura and Russ Long say they have been close friends for more than a decade.
Early last year, Shimomura was working for a consulting firm called ManTech. Long was working for the Navy, supervising Shimomura's contract. m
Today, their roles are reversed Shimomura works for the Navy, where he reviews the ManTech project. Long is a consultant for ManTech.
So it goes in the world of government contracting.
An eight-month investigation by The Washington Post found a wide-spread system of friends and favors in the award and supervision of consulting and research contracts. Instead of dealing at arms' length, many government officials and contractors are arm-in-arm, as hundreds of former federal employes pass through the "revolving door" to take higher paying jobs as federally funded consultants.
High-ranking officials and former officials from nearly every department and agency have been found at different times to be on both the awarding and receiving end of hundreds of noncompetitive contracts. These officials include agency commissioners, military generals, departmental investigators, contract program officers and procurement personnel.
The Post investigation found that the competitive bidding process -- required by federal regulation and policy -- has virtually collapsed, replaced by the very influence-peddling and "old boy" network it was designed to protect against.
In examining each of the 16,101 advertisements for research and consulting contracts in 1979, The Post found that 11,082 -- or two-thirds -- were awarded without bidding.
Many of those noncompetitive awards went to federal officials who became consultants.
"People at DOE bounce back and forth between government and industry just like Ping-Pong balls," said Newchy Mignone, a former Department of Energy procurement officer. As a result, government officials charged with monitoring contracts often regard contractors as potential future employers, hindering their objectivity.
Today, The Post examines the revolving door, beginning with the case of Sam Shimomura and Russ Long.
Sam Shimomura was walking down a hallway at the Naval Sea Sytems Command headquarters in Crystal City one day in 1977. There, he encountered an old friend, Russ Long. As Shimomura remembers it, Long, who then worked for the Navy, told Shimomura, a contractor that the Navy would need some work on sonar repairs for its ships.
Shimomura, who at the time was working for a film called Hydrotronics, said he could do the job. Long suggested that Shimomura submit a proposal -- technically called an "unsolicited proposal" -- to the Navy for a contract.
Shimomura did. In December 1977, the Navy awarded Hydrotronics a $75,000 contract for sonar repair. There was no bidding on the project.
In the months following the contract award, Long and Shimomura traveled together to work on the project.
"Russ and I are good friends," Shimomura said in an interview. "We travel around a lot together. He's the one that always bought the booze and left it in the room for us to consume. He always spent more money than I did . . . I've been to his house for dinner. He's been to mine."
By the summer of 1978, Shimomura was dissatisfied with his employers at Hydrotronics where he had been working for five years. Among other complaints, he felt his travel expense budget was too restricted, he said in an interview. He began looking for another job.
Shimomura went to several area firms for job interviews. In each case he was accompanied by Long, according to people present during the interviews. h
At Universal Systems Inc., Long said that if Shimomura were given the job, the Navy contract would leave Hydrotronics and follow Shimomura to the new firm, according to Carl Black, a former USI executive who sat in the interview.
According to Black, Long also said: "I'm going to be retiring in a short while and moving to Florida. If you get the contract, I think I would like to see some consulting time in there for me." Long acknowledged in an interview that he was present at the meeting, but denied that he asked for any consulting time. At that time, he said, he had no plans for retiring.
Ken Reusser, the president of USI, said in an interview that he recalled the meeting with Shimomura and Long, but didn't remember what Long said. He did not hire Shimomura. "I didn't think I could afford to hire him," Reusser said.
Shimomura was hired by ManTech Inc. in Rockville. On Aug. 21, 1978, he began his new job there. That same day he began working on the sonar repair project. No contract had yet been awarded to ManTech to do such work.
ManTech had discussed the sonar work with Long even before Shimomura was hired by the firm, according to Jack Hughes, director of corporate business operations for ManTech.
Shimomura worked on the project without a formal contract for almost a year. In July 1979, the Navy formally agreed to pay for the previous year of work, and awarded ManTech a new noncompetitive contract to continue the project, according to Hughes and Shimomura. To date. ManTech has been paid $199,000 for the sonar repair project.
On April 27, 1980, Long retired from the Navy and moved to a five-acre farm he had purchased in Lake County, Fla. Four months later, he signed an agreement with ManTech to serve as a "permanent part-time consultant."
In the past nine months, Long has been paid $7,000 in consulting fees by ManTech for about 10 weeks of work on the sonar contract, according to Hughes. He is still on call as a consultant.
Two months ago, meanwhile, ManTech submitted another proposal for a noncompetitive contract on the sonar repair project. The same week that the proposal was submitted, Shimomura quit his job at ManTech and went to work for the Navy. He works on sonar repair at the Naval Sea Systems Command.
In an interview yesterday, Shimomura said that he reviews various documents in the logistics end of the ManTech contract. He said that he meets with Long "from time to time" to discuss the sonar repair project. "I meet him, I go to lunch with him," said Shimomura. "Hey, a friend is a friend."
Shimomura said in a recent interview that he did not believe he ever acted improperly in connection with the contract. He denied that he promised prospective employers in job interviews that the sonar repair contract would follow him.
"I believe that's against the law," Shimomura said.
However, he suggested how he might possible have been misunderstood. "In order to come on board," said Shimomura, "I might have made a lot of recommendations."
Long, for his part, said he did accompany his friend Shimomura to at least two job interviews. But he insisted that he never asked for any consulting contracts. Said Long:
"There are a lot of people on the payroll of contractors that are retired military personnel who do nothing but bring in contracts. I don't think they're worth their salt. Why look at me? I'm just a small fish." The Major General
Jack Posner, a two-star major general, retired from the U.S. Air Force on March 1, 1978, and went to work for General Research Corp., a Virginia consulting firm.
Just as Posner was leaving the military to take his job as a consultant, the firm he was to work for won a $97,303 noncompetitive contract from the Air Force. In a recent interview, Posner explained how it happened.
Posner, now 57, was the director of manpower for the Air Force before he retired. In mid-1977, he addressed a group of contractors in Alexandria about the needs of the Air Force manpower office.
Several months after that speech, the Air Force received an "unsolicited proposal" from General Research Corp. "The proposal had great merit," said Posner. "I recommend it to the Office of Scientific Research, which makes contract award decisions."
The proposal was to develop a model for determining manpower requirements for military personnel. Posner said he respected the work of General Research Corp. He knew several people who worked there, including Richard Sommers, a former lieutenant colonel who retired from the Air Force in 1975. In the military, Sommers had worked under Posner.
In early 1978, Posner began discussing his possible retirement and a potential job at the consulting firm. "A lot of federal and military people tend to gravitate to a company like this because it gives them an opportunity to do something worthwhile," Posner said. He said he liked the offer from GRC and accepted a job before retiring.
On March 7, 1978, within a week of leaving the military, he began working at the consulting firm.
On April 15, 1978, GRC began work on a $97,303 manpower contract for the Air Force. A year later, the contract was renewed with no competitive bidding, for $99,774.
"Since I've been out [of the military] I've had very little contact with the Air Force," Posner said. "I don't use my contacts to get contracts." The Verbal Contract
On March 28, 1978, William F. Pierce, an acting executive deputy commissioner of education at the Department of Health, Education and Welfare, signed a memo waiving competitive bidding and approving a $126,000 contract for a week-long "retreat" for educators.
The conference, in Brownsville, Tex., was run by the Council of Chief State School Officers.Pierce attended the gathering in late July 1978.
In October of that year, Pierce left Health, Education and Welfare to take a post as the executive director of the Council of Chief State School Officers.
By the time he took the job, Pierce said, the council already had submitted a proposal to HEW for a contract for a 1979 conference, this time in Vermont. Pierce said the council had not yet heard from HEW, so he telephoned Ernest Boyer, the commissioner of education, for whom Pierce had worked the previous year.
"I called Ernie and I said, 'What's the status? When are we going to hear from you? . . . We need approval now so we can organize the conference.'"
Boyer gave Pierce an oral approval by telephone. Pierce then began organizing the conference, spending HEW money before a contract was formally awarded.
"There's nothing wrong with that," Pierce said. "That happens frequently."
At the same time, the Office of Education procurement division was preparing to write a contract for the conference. But they had a problem in arriving at a contract price.
In a memo dated May 30, 1979, Fred Will, director of the Office of Education contracts office, wrote that he spoke with Pierce by telephone about the contract.
"Dr. Pierce stated he could not live within the $90,000 maximum figure I recommended to Dr. Boyer," Will wrote. "His objection stemmed mainly from the fact Dr. Boyer had already given him the go-ahead and he has . . . already begun to line up the conference. This, of course, puts [HEW] in a very weak negotiating position."
The conference was funded at $99,000.
"To suggest that there's something improper here bothers me," Pierce said in an interview. "I don't see anything inappropriate or unusual with my coming here and asking the Office of Education -- which has funded a program for 10 years -- to fund it for an 11th."
Earlier this year, Pierce submitted a proposal asking the Office of Education to fund the program for the 12th year. This year's conference site -- Daytona Beach, Fla. On Feb. 25, William Smith, who replaced Boyer as commissioner of education, approved the contract, again on a noncompetitive basis.
Smith signed a three-paragraph memo waiving bid competition and approving the $99,000 contract. With the exception of one word -- "1979" was changed to "1980" -- Smith's memo was exactly the same as the memo signed by Boyer the year before, approving the Vermont conference.
The memo began: "After carefully considering the alternatives . . ." Playground Safety
On Jan. 23, 1978, Carole Willett, a program analyst for the Consumer Product Safety Commission, wrote a "memorandum of need" concluding that the government should conduct a study on playground equipment safety.
Nine months later, Willett resigned and went to work for a consulting company. She immediately submitted a proposal to the Consumer Product Safety Commission and was awarded a $20,000 contract without competition in five days.
The contract was to conduct a study on playground equipment and skate board safety.
In an interview, Willett said that before she left the government job, she asked the commission's assistant general counsel, Richard W. Allen, if her new job might create a conflict of interest. He said it would not.
Willett resigned from the commission on Sept. 5, 1978. Twenty days later, she signed an employment agreement with the Onyx Corp. On the same date, she submitted a contract proposal to the Consumer Product Safety Commission.
Also on that same day, Ann Pavlich, a program officer at the product safety commission, reviewed the proposal for technical sufficiency and concluded it was fine. She was the only person to evaluate the proposal on technical matters.
Pavlich and Willett both said in interviews that they are close personal friends. They had worked together in the same suite of offices.
"Sometimes it's just as easy to go to a contractor when you know they have someone with talent," Pavlich said.
On Sept. 30, 1978, the contract was awarded to Onyx -- five days after the proposal was received by the government. The next day, Oct. 1, was Willett's first day on the job with Onyx Corp. Too Late
Larry F. Darby resigned from his position as chief of the Common Carrier Bureau of the Federal Communications Commission last July. On Jan. 4, 1980, his successor, Philip L. Verveer, asked the FCC to fund Darby at $312.50 a day for 16 days' work.
The short-term contract was to provide a report on international communications for use in a commission report on Combat. It was to be delivered to Congress no later than May 1.
To meet the deadline, the purchase order was stamped "ASAP," bureaucratic shorthand for "as soon as possible." Given the deadline, "a competitive procedure would be unavailing," wrote an FCC attorney.
Nonetheless the FCC placed an advertisement in the Commerce Business Daily, the official government procurement publication, noting it was negotiating with Darby. Three people responded to the advertisement. All were turned away without the opportunity to submit a proposal.
One of those was Adrienne Edyth, a California consultant. "I think it's wrong if you're not allowing people to bid on a contract based on the clarity of the proposal," she said.
Darby turned in his 60-page report on April 30, too late to be of any value for the FCC report to be turned over to Congress the next day.
"Knowing I wasn't going to make the deadline, I focused on other matters," Darby said in an interview. "I would not have taken the contract and Phil [Verveer] would not have granted the contract if it was a sweetheart deal. That was not a part of it."
Joe Seltzer was inspector general at the Department of Energy from Oct. 1, 1977, to May 20, 1978. "After DOE my family and I went on holidays and then I became a consultant," said Seltzer.
"It's a world that's alien to me. It's a world I'm not that envious to know about. But I'm 60 years old and I don't want to just sit at home," he said.
Seltzer said he can't remember investigating a single consulting contract while inspector general at the Department of Energy, but he does express misgivings about the system.
"There's too much feeding at the public trough. I'm not partial to it," he said. "I never felt there was a need for using consultants unless it was to persaude Congress of our objectivity . . . I look at the Beltway bandits [all the consultants headquartered around Washington's beltway] and I say 'My God.' I just can't believe the amount of money that's around to be plucked."
Gilbert F. Stromwell, a former asistant inspector general at the Department of Energy, recalls that his staff was so small "we couldn't even begin to make a dent" in investigations of problems with contractors.
"I've always felt that in addition to the problem that we might be wasting money -- large amounts of it -- we also might not make our mission," Stromwell said in an interview. "The nation might stand or fall on our making our mission and meeting the nation's energy needs."
Now 49, having spent 25 years as an investigator for the General Accounting Office before going to the Department of Energy, Stromwell talks about his future:
"I think I'll try to get some part-time work, maybe some consulting. The only other thing you could do is sit on the sidelines and starve to death. Sure, there's a revolving door."