Will Obama Respond to the Call to Increase the Dismantlement Rate Before Upcoming Summit?

Our hats are off to Senator Russ Feingold (D-WI) and Representative Ed Markey (D-MA) for sending a letter today to President Obama asking that he increase the dismantlement rate of retired nuclear weapons. This is an issue we raised in our recent op-ed published in The Hill. The 39 percent decrease in dismantlement of retired weapons in Obama's FY 2011 budget will exacerbate the growing backlog of thousands of nuclear warheads in the dismantlement queue and raises concerns about security. A number of our most secure military storage bunkers are filling up fast. For example, the Air Force's most secure facility, the Kirtland Underground Munitions Storage Complex, is virtually full. As more warheads are likely to be retired as a result of the new START treaty and the Nuclear Posture Review, it's not clear that there are adequate secure storage facilities for these excess warheads. Until the retired weapons are dismantled, they could still be used by the U.S. (or terrorists), sending a mixed message to the nations of the world.

We were encouraged to read in the letter that NNSA informed the Members that with increased funding, the Pantex Plant could increase the dismantlement rate by 50 percent without building any new facilities.

Announcing an increase in the dismantlement rate would be a great way for President Obama to generate some momentum for the Global Nuclear Security Summit that he is convening next week for 40 other nations. (POGO is part of the Fissile Materials Working Group, a bipartisan group of the leading experts working on this issue, which is convening a non-governmental summit the day before, on April 12, 2010, to bring together leading international NGOs, nuclear industry representatives, the media, and other relevant parties to discuss the nuclear security agenda.)

Our op-ed in The Hill also outlined some ideas for where Congress can find extra funding for dismantlement: by scrapping unnecessary big-ticket construction projects such as the Uranium Processing Facility (UPF) at Y-12 National Security Complex in Tennessee, which creates a long-term purpose for large stocks of highly enriched uranium (HEU). The justification for the facility is that it's needed to produce the HEU components of nuclear weapons, but this excuse is shoddy. There are thousands of perfectly good components in storage, and there is already space at Y-12 to build additional components after the stockpiled HEU is downblended.

-- Ingrid Drake

Better Government Oversight = Better Contractor Performance (Yes, Even in Weapons Procurement)

As Scott pointed out in his previous entry, contractors perform better when the federal government exercises oversight. Yesterday's mammoth Government Accountability Office (GAO) report on Selected Defense Department Weapons Programs provides more evidence that oversight can improve program performance when Congress acts on the lessons learned from acquisition problems and makes meaningful improvements.

One of the systemic problems in in the Department of Defense's (DoD) weapons procurement is that it doesn't consistently use what GAO terms a "knowledge-based approach" -- making sure that the Pentagon knows enough to establish relatively stable requirements, technology, and design before a program goes forward. Yesterday's report found that DoD has improved their implementation of this approach when it comes to technology maturity, which "coincided" with a change in the law (specifically, a provision in the National Defense Authorization Act) that required all programs entering system development to certify that their technology has been demonstrated in a relevant environment. See that: find a problem, legislate a solution that requires more vigilant oversight of the problem, implement the solution (this part is key), and the problem is mitigated, if not solved.

Unfortunately, the GAO also found that there may be a decrease in the federal government's control of their weapons programs:

"For the first time since we began reporting on program office staffing in 2008, programs reported having more nongovernment than government staff working in program offices....The greatest numbers of support contractors are in engineering and technical positions, but their participation has increased in all areas, from program management and contracting to administrative support and other business functions." (Emphasis POGO's)

-- Mandy Smithberger

Contracting - Improvement or the S.O.S.?

Take the contracting hot tub time machine back a few years to the early 1990s. Mötley Crüe was topping the charts, and government reform zealots shifted the thinking about how the government should operate, including how it should purchase good and services. Some of those reforms have been hits, others have not.

Today, the Obama administration is attempting to shift the contracting culture back to one that places a premium on spending taxpayer dollars wisely. Revolving doors have been closed, outside influences have been mitigated, contracting advice has been distributed, and acquisition memos have been published.

One aspect that hasn't changed is the endless stream of government reports highlighting failures in the contracting processes and wasteful federal spending. In March, the House Armed Services Committee's Panel on Defense Acquisition Reform issued its findings and recommendations. One reporter described the buzz around the release of the report with one word: "crickets." The report highlights the need to improve the acquisition system, requirements definitions, the work force, and financial management systems, and to increase competition. POGO can't argue with any of these recommendations, but wonders how this report is any different than other government reports that are collecting dust on book shelves. What does the DoD and Congress plan to do with the results of this study – ignore it, nibble around the edges, or make a real attempt to resolve contracting deficiencies?

A recent report by the DoD IG provides a great example of the pitfalls of poor contract planning and oversight. Due to poor contract requirements and oversight on a KBR vehicle maintenance contract (LOGCAP III task order 159) in Iraq, KBR racked up millions in costs for maintenance services that were not required. According to the report, "KBR utilization reports indicated that from September 2008 through August 2009, there were 213,570 available man-hours for tactical vehicle field maintenance services, but that only 14,068 actual man-hours were needed to perform the maintenance required by the Army." One article stated that "what the military got was as many as 144 civilian mechanics, each doing as little as 43 minutes of work a month, with virtually no oversight."

The Army has taken steps to correct the problem, but once again, taxpayers are left footing the bill. I hate to sound too skeptical, but these reports, and the long life-span of many of the problems that are identified, make me wonder if waste, fraud, and abuse are too big for the government to fix. Are these problems a mere cost of doing business? A recent State IG report says that contractor performance is directly related to federal oversight, but can we oversee everyone all the time? History repeats itself in many of these reports, but we are often stuck in the same 'ol situation (S.O.S.).

-- Scott Amey

Photo: http://www.flickr.com/photos/banfflakelouise/ / CC BY-NC-ND 2.0

Are Agencies Leaving Money on the Table by Failing to Implement IG Recommendations?

Kudos to Rep. Darrell Issa (R-CA), Ranking Member of the House Committee on Oversight and Government Reform, for inquiring whether federal agencies have come any closer to taking final action on thousands of unimplemented inspector general (IG) recommendations.

Last January, an astonishing report issued by the Committee's majority staff found that agencies could save taxpayers over $25 billion by implementing thousands of open recommendations made by the IGs between 2001 and 2008. Following up on that report, Rep. Issa has written to 75 IGs requesting that they provide the Committee with the current number of open recommendations, the cost savings that could be obtained by implementing these recommendations, and the IG's plans for addressing the most important open recommendations moving forward.

We hope that Rep. Issa's inquiry will encourage both agencies and IGs to focus not just on output, but also on the ultimate outcome of IG recommendations. In POGO's recent report on IG accountability, we argued that it's not enough for IGs to simply say that an agency has concurred with their recommendations, as many IGs do in their semiannual reports to Congress:

Far more useful in determining overall OIG effectiveness would be information on recommendations that were implemented, and whether the results were as anticipated, actual monetary recoveries, and the implications of significant unimplemented recommendations.

As the IGs prepare their response to Rep. Issa's letter, they should also consider making this information a regular part of their reporting to Congress and the public.

At the same time, it's simply unacceptable that so many agencies have been dragging their feet in implementing IG recommendations if they agree with them. In addition to saving taxpayers billions of dollars in "easy money," many of these recommendations would also help the agencies function more effectively by addressing their systemic management problems. For instance, POGO has criticized the Securities and Exchange Commission (SEC) for failing to act on hundreds of recommendations made by its IG, especially in cases where the IG uncovered serious findings of management abuse and deficiencies in the agency's inspection and enforcement practices.

Congress has a crucial role to play in holding both the agencies and the IGs accountable for implementing these recommendations, and we applaud Rep. Issa for stepping up to the plate.

-- Michael Smallberg

Morning Smoke: OMB Seeks Input on New Definition of "Inherently Governmental Function"

Defining 'inherently governmental' jobs by Ed O'Keefe [Federal Eye]

EADS 'Will Bid,' Sarkozy Says by Colin Clark [DoD Buzz]

Drug firm investigated FDA officials by Eamon Javers [Politico]

Defense Acquisitions: Assessments of Selected Weapon Programs [Government Accountability Office]

High court restricts whistleblower lawsuits [The Associated Press]

Insider-Trading Case to Test SEC's Reach by Kara Scannell [The Wall Street Journal]

GOP lawmaker wants follow-up on IG recommendations by Robert Brodsky [Government Executive]

SEC Let Politics Spur Short-Sale Decision, Sirri Says by Nina Mehta [Bloomberg]

Word War III

The battle over the definition of "inherently governmental function" rages on, and the pro-insourcing forces are hauling out the heavy artillery.

Two weeks ago, 11 Democratic Senators sent a letter to Office of Management and Budget (OMB) Director Peter Orszag urging him to substantially expand the definition of inherently governmental function.

“We can't continue to allow federal agencies to lose control of mission-relevant functions by giving contractors a decisive role in how they are executed,” the Senators warned. They also recommended that Orszag set deadlines for each agency to identify and insource any work that was inappropriately contracted out.

Section 321 of the fiscal year 2009 National Defense Authorization Act (signed into law by President Bush in October 2008) directed the OMB to develop a new, government-wide definition of inherently governmental function by October of last year, and the pressure is mounting as Orszag struggles to finish Congress' homework assignment.

The Senators' letter bolsters President Obama's views on contracting reform as outlined in this March 2009 memorandum to the executive agencies. Obama seems determined to break with previous administrations and chart a new course for federal contracting.

An activity defined as inherently governmental is supposed to be performed by a federal government employee, not a private contractor – in theory. In reality, the line separating activities that should and should not be outsourced has been blurred. As a result, contractors are performing or have performed a wide variety of services that are either inherently governmental or very close to it.

The problem is that the definition of inherently governmental function has been gradually watered down over the years. Once, functions were either classified as inherently governmental or commercial. Now, the agencies have a growing list of terms at their disposal that allow them to stretch the boundaries. Functions that once would have been classified as inherently governmental are now slapped with less-certain terms like “core,” “critical” or “mission-essential.” POGO is glad that the Senators called for a definition of inherently governmental function that is expansive enough to eliminate the need for agencies to use such questionable terms.

OMB is expected to publish the new definition sometime tomorrow.

-- Neil Gordon

UPDATE: OMB and OFPP (Office of Federal Procurement Policy) have just issued a proposed policy letter containing the new definition of inherently governmental function. Click here to view POGO's statement on the proposed policy.

Morning Smoke: RIK's Dead

Termination of Royalty-in-Kind (RIK) Eligible Refiner Program [Federal Register]

More F-35 Style Cost Scrubs Coming by Colin Clark [DoD Buzz]

SEC Quizzes Wall Street Firms, Seeking Lehman-Like Accounting by David Scheer, Joshua Gallu and Jesse Westbrook [Bloomberg]

Homeland Security IG often in conflict with agencies on corruption probes by Andrew Becker [The Washington Post]

Data Show Bank Regulator Goes Easy on Enforcement by Marian Wang [ProPublica]

ICE Hires House Committee's Roberson as Lobbyist by Matthew Leising [Bloomberg]

On doing business with directors at bailed-out banks... by Theo Francis [footnoted.org]

Treasury's Citi sale: TARP's last hurrah? by Colin Barr [Fortune]

End KBR's Monopoly in Iraq

We may have spoken too soon when we praised the Army for taking past contractor performance into consideration for the LOGCAP program. POGO was recently informed that the Army is considering awarding KBR additional work in Iraq under the LOGCAP III contract. That action would continue KBR’s monopoly on LOGCAP work in Iraq, rather using the competitive procurement procedures created under LOGCAP IV.

In a letter sent today to Army Secretary John McHugh, POGO urged the Army to end KBR’s monopoly in Iraq and reconsider the continued use of the LOGCAP III program. To better evaluate goods and services, and to get the best value for taxpayers, the government must encourage genuine competition.

The spotlight on KBR’s work in Iraq was also reviewed today as company representatives testified before the Commission on Wartime Contracting at a hearing on the “Rightsizing and managing contractors during the Iraq drawdown.” The military is going to have to handle many issues, including troop withdrawals and determining adequate levels of contractor support needed for ongoing activities. Additionally, the government must resolve logistical problems with the goods that have brought into the country to support military and reconstruction effort – sometimes with a lack of planning and management.

-- Scott Amey

Morning Smoke: Hearing to Address Drawdown of Contractors in Iraq

Hearing: Rightsizing and managing contractors during the Iraq drawdown [Commission on Wartime Contracting] - Watch the hearing live at C-SPAN 2

Afghan corruption: How to follow the money? by Karen DeYoung [The Washington Post]

Defense investigates information-operations contractors by Walter Pincus [The Washington Post]

Reform in Congress Lacking Cash Clause to Stop Lehman-Like Runs by Yalman Onaran [Bloomberg]

FDIC Stands Between J.P. Morgan and a WaMu Payoff by Dan Fitzpatrick [The Wall Street Journal]

Does This Bank Watchdog Have a Bite? by Andrew Martin [The New York Times]

Earmark Requests Going Online -- In Wrong Formats by Jim Harper [Cato @ Liberty]

Law Review Papers on the State Secrets Privilege by Steven Aftergood [Secrecy News]

NNSA to combine Y-12/Pantex contracts by Frank Munger [Atomic City Underground]

Congress Should Not Let Itself Be Rolled by Nuke Labs

Realizing that there is mounting doubt on the Hill in the wisdom of spending billions of dollars on four new buildings for the creation of new components for nuclear weapons, the directors of three national laboratories are going on the offensive. As Politico reports, the directors of Los Alamos, Lawrence Livermore and Sandia National Laboratories have challenged the findings, and frankly, the credibility, of one of the most independent and respected technical expert groups, JASON. Last year, JASON found that the life of the nation’s nuclear warheads, including plutonium pits and HEU (highly enriched uranium) secondaries, can be extended safely and certifiably for decades without replacement.

One key factor in the story, that Politico didn’t state clearly enough, is that unlike JASON, the Labs and Department of Energy (DOE) are not independent experts. They have a financial and bureaucratic conflict of interest. The Labs are privately run, and would see far less money coming in the door without these new buildings and programs. Unfortunately, they have convinced many decision-makers that two of these buildings — the proposed $5 billion Chemistry and Metallurgy Research Replacement - Nuclear Facility at New Mexico’s Los Alamos National Laboratory (LANL), and the unnecessary $3.5 billion Uranium Processing Facility (UPF) at Y-12—and their missions, are necessary to ensure that the stockpile is reliable.

One factor that might allow the Labs to get away with this offensive is an intellectual insecurity on the part of Congress -- an insecurity that we have heard even penetrates DOE -- which could keep it from challenging the Lab Directors and DOE leadership with their PhDs and Nobel Prizes. But just because someone is an alleged science genius does not mean they are an expert in management, nuclear security, or good government. Congress shouldn't get intimidated into not pressing the Labs and DOE leadership for specific information on why more funds are being spent to revitalize the nuclear weapons complex instead of investments that increase nuclear security.

Finally, Congress should remember that they were rolled by the Labs in the mid-1990s, when they gave the Labs their scientific toys — NIF at Livermore, DAHRT at Los Alamos, several big-ticket items for Sandia, and supercomputers for all — in exchange for their support of Comprehensive Test Ban Treaty (CTBT). They got their toys — which we are still paying for — but Congress did not get its treaty.

It seems to us that the tail is wagging the dog.

-- Peter Stockton and Ingrid Drake

Did Triple Canopy Instruct Its Guards to Lie to State Department Investigators?

Props to Dan Schulman at Mother Jones for finding an incredible footnote buried within the State Department IG’s audit on the shortcomings in State’s oversight of Triple Canopy, the contractor responsible for guarding the U.S. Embassy in Baghdad.

The footnote states that in anticipation of the IG’s site visit, Triple Canopy’s program manager, deputy program manager, and guard force commander emailed site managers a document entitled “Pre-Inspection Guidance” with instructions for how to respond to questions about breaks and other working conditions:

“Answer to break question for guards is 15 minutes morning, 30 minutes lunch, and 15 minutes afternoon. DO NOT SAY: “I do not have a relief supervisor today.” Instead, and only if asked, I am sharing a relief supervisor with (name other venue). Do not elaborate on answers to inspectors questions. Answer only the questions. What you say can and will be used against you.”

Schulman points out that “the majority of the guards the IG’s office interviewed said they received their breaks as required—but four members of Triple Canopy’s embassy team acknowledged this wasn’t always the case.”

We were reminded of an incident last fall when we learned from whistleblowers guarding the U.S. Embassy in Kabul that someone had put up a poster calling the whistleblowers “rats” and warning them that their jobs and families could be in danger. State put up its own poster in response assuring guard force members that whistleblower intimidation would not be tolerated, but we have to wonder if Triple Canopy is on board with this message. If anyone has witnessed threats against whistleblowers at the Baghdad Embassy, please let POGO know.

We also wanted to highlight some photos in the latest IG report illustrating the unsafe living conditions for the Embassy guards.

The arrow in the photo below shows a live wire lying on the floor of a high-traffic area in the barracks that’s lacking in sufficient exits, fire alarms, smoke detectors, and fire extinguishers:

Kabul Embassy Deja Vu

Does the State Department have the capacity to effectively manage an embassy security contract in a war zone?

It depends on your definition of effective.  A previously unreleased report by the Department of State Office of Inspector General (IG), made public today by POGO, found shortcoming after shortcoming in State’s ability to effectively monitor Triple Canopy, the contractor responsible for guarding the U.S. Baghdad Embassy. The report gave POGO a case of Kabul déjà vu.

The audit found that significant training and language deficiencies in the Triple Canopy guard force violated the contract and compromised security at the Baghdad Embassy. Conditions for guards at Camp Olympia—the temporary facility where many of the guards are housed—were "unsafe," included "four times the acceptable number of guards residing in a room" and "frayed electrical wires in high traffic areas." In the most serious case, there was an electrocution death there in September 2009.

Triple Canopy’s guards also reported working an average of 10 to 11 consecutive days, and the IG found that some worked as many as 39 days in a row.

In the areas in which State conducted the most oversight, Triple Canopy performed well. But the audit found that in the areas in which State had little oversight—such as training and English language proficiency—the contractor’s performance failed to meet contract requirements.

Nonetheless, the audit concludes that the contract is “generally well-managed.”

A number of the problems identified in the audit echo those uncovered by POGO at the U.S. Embassy in Kabul. For instance, in Kabul we found that “chronic understaffing” plagued the Embassy guard force, run by Armor Group North America (AGNA). In some cases, the shortage of guards resulted in some guards working “14-hour-day work cycles extending for as many as eight weeks in a row, frequently alternating between day and night shifts.” We also found a significant problem with the ability of the AGNA guard to communicate with each other, as is the case in Baghdad.

While in both Baghdad and Kabul it would be easy to lay the blame for all these shortcomings solely on the contractors, the audit seems to suggest, and we agree, that the blame ultimately rests with State.

In light of the importance of effective oversight, we find it shocking, as we noted earlier this week, that the State Department appears to be planning to “augment” its oversight of the security contractors in Kabul with a contractor.

-- Jake Wiens