Contractors Overbilled As Much As $44 Million
It's a tale as old as bureaucracy
itself... a contracting program intended to make the Federal
Aviation Administration a more efficient operation, has instead
resulted in millions of dollars in overruns, according to a report
by the Transportation Department inspector general's office.
The program -- first implemented in 2002, and intended to speed
certain FAA programs and processes by allowing the agency to select
services from 142 approved vendors -- has since been disbanded,
after the report found many of those programs were poorly
supervised.
According to the report -- set to be released Monday, but
obtained ahead of time by The Washington Post -- as many as half of
all contracted services were awarded without being put out to bid,
resulting in a scenario that allowed the agency to be overcharged
by several contractors.
Iowa Senator Charles E. Grassley requested the investigation
into the program when an FAA contracting officer approached
auditors last year with questions about overbilling by DC-based
Crown Consulting Inc. An investigation revealed more than $56,000
in overcharging by that contractor alone... a sign of news to
come.
Predictably, Grassley was not happy with the findings of the
report.
"It's just outrageous how the FAA was not looking out for the
taxpayers' dollars," Grassley said. "Three words would sum this up:
absolutely no accountability.
In one example of wasteful spending cited by the Post, one
contractor charged the FAA $35 per hour for an administrative
assistant position. If that sounds high, just wait... one month
later, the contractor called the same worker an 'analyst,' and
raised her hourly pay to $71 an hour -- without offering proof of
her qualifications.
On more than one occasion, former FAA employees were also hired
by contractors. That's not against the law... but the report says
it may have impacted the "FAA's ability to maintain arms-length
relationships with its contractors when negotiating contract terms
or overseeing contractor performance."
The inspector general estimates labor costs alone may have
resulted in as much as $44 million in cost overruns -- had the
agency not pulled the plug on the program, which it (finally?) did
in March 2006, after taking steps to address issues raised by the
IG over a year earlier.
Today, the FAA says, all but five of the suspect contracts have
been put out to bid... and rules have been set for dealing with
former agency employees now working for FAA contractors.
"We have dissolved this entire program," said FAA spokeswoman
Laura Brown. "We have already taken many of the steps that the IG
recommended, and as the IG noted, we have agreed to most of the
recommendations and we are taking further actions in response" to
the report.
No mention is made in the report of additional
contractors involved in the suspect dealings... nor are the
identities of FAA officials involved revealed.
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