Industry Insight: Congressional Smoke Difficult To Separate From Fire

Not surprisingly, at least a dozen pieces of legislation are currently pending in Congress that would impact government acquisition in some manner. This is to be expected considering, one, the change in party control, two, the fallout from Katrina contracting issues, and three, concern about overspending in Iraq.

Beyond that, there is clearly an agenda for increased oversight and investigation into conduct. Some congressmen have stated this agenda is more important than pending legislation. It is also harder to predict its impact. As a result, five months in, we still wonder what kind of impact this Congress may have on the business of government.

Larry Allen is EVP of the Coalition for Government Procurement (CGP). Look for a new column from CGP twice a month.

While many of the bills include onerous provisions, such as placing a hard cap on subcontracting, increasing protest opportunities and limiting single award contracting, few of the bills are as far-reaching as those of us who follow these matters had initially feared. Some bills would merely generate a slew of new reports without actually changing much.

Early signs pointed to quick passage of single award limitations and other packages in the Iraq supplemental appropriations measure. Powerful House members pushed for the adoption of such provisions, a sign many in the industry took to be the first salvo of change. Just as quickly, however, the provisions were removed from the supplemental over a seemingly trivial point of order raised by the Senate. It currently looks like it will be several months before any major legislative change is enacted.

It is not by any means time to exhale, however. There is still an active investigation and oversight agenda that could foretell serious, negative policies in government contracting.

The team of investigators now at work for Rep. Henry Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, is issuing subpoenas as fast as the supply office can keep paper in stock. While there have been a few high-profile subpoenas issued to the usual suspects, such as Secretary of State Condoleezza Rice, there have also been several issued to rank-and-file careerists. Your average GS-13 has less experience and less support in such matters as the Secretary. Many observers feel these actions are low blows intended to intimidate not just the person to whom they were issued, but all professionals in and out of public sector that conduct government business.

These investigators are not legislators, either, and may be more interested in scoring political points than actually improving the business of government. This worries industry observers like me. Legislative professionals, regardless of ideology, understand that government does have to function. You can tweak it in varying degrees, so long as the trains run.

Investigators, on the other hand, may be perfectly fine causing a wreck that results in immediate and long lasting problem for those who actually work in this environment.

In addition to investigators, some elected officials believe that a comprehensive code of civil penalties is not enough to punish wrongdoers. For the first time, there is a discussion of whether criminal penalties should be expanded into "every day" contracting. Already, the government has an impressive array of criminal statutes, though usually these are reserved for those who clearly deserve them. The more recent discussion could make even mid-level contractor employees criminally responsible for any missteps their company makes.

The net impact of such endeavors? The operation of government will not improve, I will tell you that. Instead, these trends will drive competent officials out of government for fear that they will be keel-hauled for business decisions. Likewise, small and innovative businesses will be driven from the market in droves as innovators avoid the potential tag of "criminal" attached to efforts that promote emerging technologies meant to improve government.

This last point is particularly ironic, as the House seeks to increase the small business set-aside goal from 23 percent to 30 percent. Seeking to criminalize innovative behavior, and threatening business partners with Congressional subpoenas will hamper efforts to reach that goal. You want to know the single best thing Congress can do for small business contractors? Pass a clean Iraq supplemental. Release needed money into the market where it can do more good than just about any other initiative currently under consideration.

Usually, it is easy to forecast likely legislative outcomes on the federal market. The players and their positions are generally well-known and there is mutual respect, if not agreement, of most viewpoints. This year, though, is a whole different story. It's not run by the usual legislative professionals. Where we end up, therefore, is anyone's guess. Let's hope that everyone understands that it is better to have creaky trains than a wreck that brings the whole system to a stop.