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Wednesday, April 4, 2012

What happens in Las Vegas -- sometimes is a scandal

Schram: A costly GSA convention at Las Vegas resort
Washington’s newest scandal erupted with a clash of symbols. In this case, the General Services Administration’s new, eyes-alert mantra of “If You See Something, Say Something” clashed with the old play-and-party wink-wink of “What happens in Vegas stays in Vegas.”

Some 300 GSA bureaucrats apparently celebrated with the sound of silence rather than boasting about the good times that rolled at taxpayer expense at their October 2010 GSA Western Regions Conference. It was held at the M Resort and Casino, not far from the Las Vegas Strip.

So they didn’t noise around the fun they had with the clown and the mind reader the federal government hired. (Note to readers: Yes, really. But make up your own joke; I’m on deadline.) Nor the frolic the GSA employees enjoyed as our guests at the $31,208 reception.

All of that required extensive planning, of course. That must be why the government paid $130,000 for six trips so planners could eyeball things and make sure the setting in Henderson, Nev., just south of Las Vegas, would not become a site for sore eyes? Or the $2,000 party in the suite of GSA’s Public Buildings Service chief Robert A. Peck.

Apparently no one said anything -- at least not publicly. But according to The Washington Post, GSA Inspector General Brian D. Miller said that a GSA deputy administrator, Susan Brita, told Miller’s office about the expenditures for the four-day Western Regional conference. That led to the inspector general’s investigation, which culminated in a report issued this week.

“As the agency Congress has entrusted with developing the rules followed by other federal agencies for conferences, GSA has a special responsibility to set an example, and that did not occur here,” The Post quoted Miller as writing in his report. Miller said the GSA “followed neither federal procurement laws nor its own policy on conference spending.”

Cost of federal agency's conference was an unacceptable largesse: An editorial
The agency spent more than $822,000 to organize and hold a conference for about 300 employees in October 2010 at the M Resort Spa Casino. The expenses included $146,000 in food and drinks, including $44 per person breakfasts and cheese displays that cost $19 each.

They also participated in a "team building exercise" in which they assembled bicycles at a total cost of $75,000 -- that's not a typo.

These infuriating examples are only part of the excess, according to an investigation by the GSA's inspector general.

President Barack Obama was reportedly furious, and the White House condemned the conference as "a complete violation of administration rules." GSA administrator Martha Johnson fired her two top deputies Monday and then resigned herself. Ms. Johnson called the conference "a significant misstep" and said "taxpayer dollars were squandered." Resigning is the least she could have done.

Prosecutors also need to examine the GSA inspector general's findings that conference organizers may have violated federal procurement laws. Investigators found that GSA personnel disclosed a competitor's proposal price to a favored contractor. The report said they also promised the resort an extra $41,000 in catering charges "in exchange for the 'concession' " of the hotel honoring the government's limit on lodging. Investigators also said government employees told the team-building contractor its maximum budget and then agreed to pay the contractor that amount.

These are serious allegations that show conference organizers treated taxpayer dollars like Monopoly money. But if they broke any laws, they should not get a Get Out of Jail Free card.

GSA scandal sheds light on small business contracting fraud
Buried in the laundry list of misconduct claims against the General Services Administration is further evidence of what at least one federal official and one trade group call a critical problem for small employers: improper contracting that diverts government spending to large corporations instead of small businesses.

The GSA inspector general’s report, which blasts the agency for excessive spending on clowns, mind readers and lavish parties during a training conference just outside Las Vegas, claims that officials awarded a $58,808 contract to a large audio and visual services firm when federal regulations require contracts of such size be reserved for small businesses.

The inspector general also said the agency violated federal rules by neglecting to publish a solicitation for the contract on the government’s list of Federal Business Opportunities and by providing Royal Productions with a competing bidder’s quote — thus allowing the company to present a winning offer. Subsequently, the agency paid roughly double what the contract outlined for the company’s employees’ hotel rooms, according to the report.

“The diversion of small business contracts to large corporations has gone on for a dozen years and the only thing the government has done in response is remove the transparency,” Lloyd Chapman, president of the American Small Business League, said in an interview, later adding that the procurement review system available to the public has become increasingly difficult to use in recent years.

The federal government has a stated goal of awarding 23 percent of contract dollars every year to small businesses. However, Chapman pointed to his group’s recent analysis of government data that showed that 72 of the 100 companies receiving the highest amount of federal small business contracts in 2011 were firms that exceeded the Small Business Administration’s size standards for small companies.

“Any time you take a sample of what the federal government is doing, and anytime you take a look at small business contracting in almost any federal agency, what you find is money going to the biggest companies in the world,” he said.

Back in October, the SBA’s inspector general published a report acknowledging that small business contracting was the agency’s most serious management and performance challenge. Specifically, the report stated that “procurement flaws allow large firms to obtain small business awards and agencies to count contracts performed by large firms towards their small business goals.”

This reminds me of a tale told to me my an employee of a contractor for one of Guam's "autonomous" executive agencies. He said that his company was obliged by agency management to host a partnering conference to be attended by agency staff -- in Las Vegas. He was eventually removed virtually overnight for not being a "team player". So I was told.

In a similar vein:

DOE settles procurement case
The Guam Department of Education will have to pay $19,324 in attorney's fees as part of a settlement in a procurement case.

Island Business Systems and Supplies filed the lawsuit against the department, its superintendent, chief procurement officer and others, in September 2010, according to John Thos. Brown, general counsel for Island Business Systems.

The lawsuit has been settled and the case will be dismissed, according to Brown.

Remedies under the Enforcement of Proper Government Spending Act allow injunctive relief as well as for the return to the government of Guam of any money that has been wrongfully expended.

Read more.

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