Contracting Time Out for Booz Allen Hamilton

By NEIL GORDON

The Air Force has just suspended from federal contracting a unit of global consulting firm Booz Allen Hamilton and recommended it for debarment. The notice was posted in the Excluded Parties List System on Monday.

The EPLS record cites the action as a proposed debarment pursuant to Federal Acquisition Regulation (FAR) section 9.406-2, which outlines the various causes for debarment: conviction of or civil judgment for commission of fraud or a criminal offense in connection with a contract; violation of federal or state antitrust laws relating to the submission of offers; commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating federal criminal tax laws, or receiving stolen property; commission of any offense indicating a lack of business integrity or honesty; or serious violations of the terms of a federal contract or subcontract.

In a statement to Federal News Radio, Booz Allen said the Air Force’s action “relates specifically and solely to the San Antonio office and individually to two current and three former employees based there.” The EPLS notice indicates that the proposed debarment includes four individuals. According to the company, the incident “involved a former government employee who we hired who inappropriately retained and provided government procurement-sensitive information.”

POGO blog readers will remember that Booz Allen recently hired former Pentagon Inspector General Gordon Heddell as a senior advisor. Ironically, we pointed out at the time that Booz Allen has a relatively clean misconduct history.

The purpose of suspension and debarment is to ensure the federal government conducts business only with responsible contractors. Suspended and debarred companies and individuals are not allowed to bid on or receive new contracts or subcontracts. Their names go into the EPLS database, which contracting officials are required to check after the opening of bids and before awarding contracts. An audit of the suspension and debarment process at the Department of Defense released last year found that the Army, Navy, and Air Force are under-utilizing suspension and debarment for poorly performing contractors and have awarded new contracts to companies and individuals listed in the EPLS.

In November, the Senate held a hearing entitled “Weeding Out Bad Contractors: Does the Government Have the Right Tools?” at which Air Force suspension and debarment official (SDO) Steven Shaw said the following:

I firmly believe that the existing suspension and debarment apparatus affords debarring officials like me the tools to not only address allegations of procurement fraud, misconduct and poor contractor performance, but also to be proactive and creative in ways that protect the government, improve our contracting process, and reduce the instances of procurement fraud at the front end.

For years, POGO has stated that the suspension and debarment system is broken and advocated for more “proactive and creative” solutions (here’s a quick trip down memory lane: 2002, 2007, 2008, 2009, 2010, and 2011). The White House understands that an effective suspension and debarment system “is an important part of making sure we live up to our responsibility to maximize the return on every dollar spent and deliver a higher quality of service to the American people.”

We’re not sure how the Air Force’s action against Booz Allen will play out. In instances involving conduct similar to what seems to have occurred at Booz Allen, suspensions have ranged from eight days in the case of IBM to almost two years in the case of Boeing.

Neil Gordon is a POGO Investigator.

Follow @NEGordon

Comments

[Mike Black]

With personal knowledge, BAH has always hired folks strategically. In other words, if you had the right contacts you were always an attractive hire for BAH. I've seen this first hand. The BAH San Antonio office has some SIGNIFICANT ETHICAL issues especially on the IT team. It doesn't come as a shock that this happened. It is a shame that as usual, so many pay for the selfish acts of a few.

[C]

The current debarment proposal isn't over hiring Heddell. The proposed debarment is over hiring LTC (Ret.) Meneses, who is alleged to have brought contract-sensitive material with him to BAH San Antonio, and then using that material in a bid.

That's a big no-no, and it's a shame that the rest of the SA office could potentially suffer for it, but that's the way the system is supposed to work.

Kudos go to BAH Corporate, though, for reacting properly when the SA office failed. IMHO BAH is likely to get the proposal denied on review because no contract was awarded, and the responsible individuals were terminated.

The irony, for those that missed it, is getting a debarment *after* hiring a former IG. :)

[Keep People Employeed]

Does our government even consider the hundreds of hardworking employees who are now in jeapordy due to the actions of a few. There will be many layoffs and an ongoing trickle down effect on thousands due to this disbarment.

If the government proved that Booz/Allen/Hamilton leadership had knowledge or participated in the alleged offense, punish them, not those who are honest and work hard to put food on the table.

[Marvin]

I don't get it, Neil. What if BA hired the guy to help it better comply with requirements and to advise on how to stay out of trouble, upgrade training in this regard, and, say, spot check some cases? Is that OK? Or, would you want a contractor to stumble along with no strong insight re how to comply?? What do you think the company or its advisor, the ex IG, are going to cook up now that he is available to advise?