Defense bill increases contractor oversight

Congress has strengthened oversight over federal contractors and lead systems integrators in the final fiscal 2008 Defense authorization bill, which is expected to be approved by the House and Senate this week.

Negotiators from both chambers approved a conference report on the bill Dec. 6. The bill authorizes $507 billion for defense and an additional $189 billion for the wars in Iraq and Afghanistan.

The legislation improves accountability in contracting, prohibits use of lead systems integrators on new programs after Oct. 1, 2010, and strengthens whistleblower protections.

“The bill combats fraud by contractors in Iraq and Afghanistan by tightening the controls and encouraging the timely reporting of waste, fraud and abuse,” said Rep. Ike Skelton (D-Mo.), who chairs the House Armed Services Committee. “This includes requiring the Department of Defense, the Department of State and the Agency for International Development to clarify the roles and responsibilities in managing and overseeing contracts. “

The bill also incorporates the Acquisition Improvement and Accountability Act, which includes requirements to improve the acquisition process and improve accountability in contracting. “On a governmentwide basis, federal agencies will be required to publicly justify the use of procedures that prevent full and open competition,” Skelton said.

In Section 802 of the conference report, it states that as of October 2010 the DOD may not award any new contracts for lead systems integrator functions for acquisition of a major system to any entity that is not already performing those functions for that system.

From the date of enactment, DOD may award a new lead systems integrator contract only if the system has not yet proceeded beyond low-rate initial production, or if the secretary of Defense certifies that such a contract is necessary for national defense.

In addition, the legislation contains whistleblower protections for Defense Department employees and contractors who report wrongdoing.

“For the first time, employees of Defense contractors who challenge the corrupt and abusive practices by their employers in Iraq, Afghanistan and here in the U.S. will have meaningful protections,” said Adam Miles, legislative representative for the Government Accountability Project, a government watchdog group. “This is an important first step to bringing accountability into the Defense contracting process.”

The whistleblower provision gives contractor employees the right to a jury trial in district court if they do not receive timely relief from DOD’s inspector general after suffering retaliation from whistleblowing.

The conferees also approved an amendment sponsored by Sens. Jim Webb (D-Va.) and Claire McCaskill (D-Mo.) creating a bipartisan “Commission on Wartime Contracting” to study and investigate federal contracting for reconstruction and security functions in Iraq and Afghanistan.

“Congress is responding to the increased opportunities for abuse created by wartime spending conditions,” Miles said. “The Commission on Wartime Contracting creates an additional safe channel for employees of contractors and the government to effectively challenge the ongoing corruption.”