The Daily Background

“The project started in 2003 with a $2 million contract to help the new Department of Homeland Security quickly get an intelligence operation up and running.” So began the lede of a Washington Post story Thursday. That 2 million dollar no-bid contract? It eventually ballooned to $124M. The Washington Post reports on the absurd waste in no-bid contracting, as evidenced by this anecdote:

By December 2004, payments to Booz Allen had exceeded $30 million — 15 times the contract’s original value. When department lawyers examined the deal, they found it was “grossly beyond the scope” of the original contract, and they said the arrangement violated government procurement rules. The lawyers advised the department to immediately stop making payments through the contract and allow other companies to compete for the work.

But that competition didn’t happen for a year– a year during which the contract doubled its worth to well over 70 million dollars. Incidentally, the contract, originally signed by the Department of Homeland Security, was later transfered to the Bush Administration VA, which, no surprise here, didn’t provide it with any oversight.

But it’s not like DHS officials were any better– according to the emails the Post obtained, officials “routinely waived rules designed to protect taxpayer money” and even let it extend for months without a formal contract; just a verbal “keep working and keep billing us” agreement. They also didn’t ask for any type of uniform payscale or fixed price for the work they did, so they decided to pay the private contractor by the hour.

And their hourly rates? Between $42 an hour and $383 an hour.

But here’s the most outrageous part. Months after oversight officials recommended that the job that Booz Allen had been given on a no-bid contract be offered to other companies that could pay lower prices, they finally decided to open up the bidding process, to avoid a company that had over-charged taxpayers by perhaps tens of millions of dollars. Here’s how the Post ends the article:

When Booz Allen finally faced competition last year, Homeland Security had broken the work into five contracts. In total, those contracts were worth more than $50 million over a year’s time.

Booz Allen won them all.

Unbelievable.

Filed under: Z-TDB Blog