“BlackPoint Distribution is one of more than 445 first-time federal contractors awarded contracts during the government’s response to the coronavirus pandemic, according to a ProPublica analysis of federal contracting data.
These new contractors have received more than $2 billion in federal spending as of June 25, often without competitive bidding or direct experience in the areas they won deals in.“
“A company created by a former Pentagon official who describes himself as a White House volunteer for Vice President Mike Pence won a $2.4 million dollar contract in May — its first federal award — to supply the Bureau of Prisons with surgical gowns.
Mathew J. Konkler, who worked in the Department of Defense during the George W. Bush administration, formed BlackPoint Distribution Company LLC in August 2019 in Indiana, state records show, but had won no federal work until May 26. The Bureau of Prisons chose the company with limited competition for a contract to supply surgical gowns to its facilities.
It is at least the second contract awarded to a company formed by an individual who had worked in or volunteered for the Trump administration; a company formed by Zach Fuentes, a former White House deputy chief of staff, won a $3 million contract just days after forming to supply face masks to the Indian Health Service. The masks did not meet FDA standards for use in health care settings, and an IHS spokesman said this week that the agency is trying to return the masks to Fuentes. Members of Congress called for investigations into the contract, and the Government Accountability Office now plans to review the deal “in the coming few months, as staff become available,” spokesman Charles Young said last week.
A lawyer for Fuentes’ company said the firm fulfilled all of its obligations to IHS under the contract.
BlackPoint Distribution’s website does not mention Konkler but describes its work as “locating, verifying and successfully delivering vital products and equipment in the midst of extremely challenging environments.” The domain name was registered on April 9, 2020. In its incorporation documents, Konkler is listed as the CEO of BlackPoint Distribution. The only contact information on the site is a web form and an email address. Emails sent to it were returned as undeliverable, and Konkler did not return multiple phone calls and messages seeking comment.
On the website for BlackPoint Creative LLC, another Indiana firm where Konkler serves as managing partner, his bio says that “since 2018, Mr. Konkler has also served as a volunteer at the White House on the staff of the Vice President, Michael R. Pence.”
In a 2018 interview with an Indiana business publication, Konkler said that another of his companies, BlackPoint Strategies was a “full-service consulting firm offering a variety of other advisory services, which focus on strategic marketing, digital marketing and crisis communications,” but also assisted Indiana companies in selling products in international markets. A search of Indiana state contracts yielded no previous or current government contracts for BlackPoint Distribution or other firms that Konkler is involved in.
A spokesman for Pence said that Konkler previously had helped coordinate some of the vice president’s travel but was not currently a volunteer.
“Mr. Konkler is not nor ever has been a member of Vice President Pence’s staff,” said Devin O’Malley in an email. “Mr. Konkler has previously helped in a volunteer capacity doing advance on trips, but has not done so since June 2019. No one in the Office of the Vice President was aware of or had any role in Mr. Konkler receiving this contract.”
Researchers at American Bridge 21st Century, a Democratic opposition research group, identified Konkler’s role.
White House volunteers are not uncommon, and typically they are involved in specific projects such as the correspondence office, which reads and answers messages sent to the administration, or in holiday decoration efforts.
Government ethics experts said that conflict of interest rules do apply to volunteers but depend on the kind of work being done. “I’m worried about conflicts of interest but also about someone who isn’t a government employee knowing the [vice president’s] travel plans,” said Scott Amey, general counsel at the Project on Government Oversight. Konkler’s online biography states that he has held a Top Secret/Sensitive Compartmented Information security clearance.
“The Bureau of Prisons took a risk awarding a $2.5 million contract to a new company,” Amey said. “Let’s hope this ends up as a success story and not another example of a pop-up contractor trying to profit from an emergency situation.”
The contract itself was awarded under urgent circumstances. The Bureau of Prisons did not issue a request for proposals because the pandemic “resulted in the need to limit competition due to compelling urgency,” Justin Long, a spokesman for the bureau, wrote in an email. The contract originally stated June 3 as the date for gown delivery to six different federal prisons, but Long said in an email that the final shipment was delivered on June 25.
BlackPoint’s contract is the largest of all federal contracts that specifically mention “surgical gowns,” according to federal contracting data.
Records show that the agency received three offers and that the contract was awarded under what are known as “simplified acquisition procedures,” a process typically used for contracts involving smaller amounts of money. Because of the national emergency declared in response to the pandemic, the threshold for using simplified procedures was raised to $13 million when purchasing commercial items such as surgical gowns. BlackPoint Distribution’s bid was the lowest, Long said.
After declaring a national emergency on March 13, the federal government relaxed procurement rules to allow federal agencies to skip competitive bidding at times in favor of a more streamlined process that could deliver personal protective equipment and other products quickly. But in doing so, it also has made deals with vendors who were unable to fulfill orders or who have provided inadequate equipment.”
The undersigned was on the staff of one of the design companies for the gun system of the Bradley Fighting Vehicle development program. I witnessed first hand one of the most costly weapons system development programs in history.
I cannot help but observe that we are undergoing a similar debacle for the Bradley’s replacement. The bottom line question: With Pandemic and civil unrest economic impact today, can we afford to embark on the equivalent of a re-release and update of the famous HBO Movie, “Pentagon Wars”?
“TASK AND PURPOSE“:
“The Army will likely end up spending upwards of $1.57 billion to develop a replacement for the Bradley Fighting Vehicle that’s served the U.S. military for nearly four decades, according to a new assessment from the Government Accountability Office — and that’s just for a fleet of prototypes.
As of January 2020, the service had doled out roughly $366.64 million in funding as part of a middle-tier acquisition program for the Optionally Manned Fighting Vehicle Increment 1 the service initiated in September 2018, according to the GAO report.
The Army is expected to spend another $1.2 billion to procure 14 prototype vehicles apiece from two separate defense contractors, an acquisition that, planned for this past March, fell apart when the service cancelled its solicitation in January in order to “revisit the requirements, acquisition strategy and schedule” prior to prototyping.
The cancellation was reportedlyprompted by the fact that the service only received one bid, from General Dynamics Land Systems, for the OMFV prototyping competition, as Army leaders told Defense News at the time.
According to the GAO report, the Army had previously planned on handing out an initial production contract award in late fiscal year 2023 and fielding the initial replacement vehicle by some time in early fiscal year 2026, but those dates are now up in the air due to the January cancellation.
“Officials stated that Army leadership is still committed to moving forward with the program, but they will need to reassess the achievability of their requirements within the desired timeframe,” according to the GAO report.
As Task & Purpose previously reported, the OMFV — part of Army Futures Command’s Next-Generation Combat Vehicle (NGCV) program — is just the latest attempt to replace the Bradley that has spanned nearly two decades.
In 1999, the Army adopted the Future Combat Systems (FSC) Manned Ground Vehicles (MGV) program was initiated as part of a broad effort to make the service’s legacy forces “lighter, more modular, and — most importantly — more deployable,” as the Army put it at the time.
That program was cancelled a decade later in 2009 and immediately replaced with the Ground Combat Vehicle program in 2010, which sought to replace the Bradley with the a Ground Combat Infantry Fighting Vehicle before being cancelled in 2014 amid rising costs and expanding requirements.”
“It’s crucial that any such network be independent of governments and left in the hands of public health officials. The data it gathers should not be filtered through bad actors such as the Chinese Communist Party, or elected officials who may have a political agenda.
One day — hopefully soon — big international meetings will return and the next Biosurveillance Conference will be held in a bigger venue with a lot more participants.”
“It was Aug. 28, 2012 in a Washington, D.C., hotel near Union Station where the National Defense Industrial Association held its first and only Biosurveillance Conference.
It was lightly attended — if memory serves. I’ll be charitable and say there were 75 attendees in the smallish room.
At least one of them — myself — was in the wrong place. Biosurveillance? I thought it would be about sensors. I was expecting to hear about typical defense and homeland security technologies designed to detect bioweapons — something akin to the Department of Homeland Security’s BioWatch program, or what the Joint Program Executive Office for Chemical and Biological Defense wanted. The agenda included Defense Threat Reduction Agency personnel.
No, actually, the attendees were mostly in the public health field, and they were talking about a worldwide database where doctors, public health officials, veterinarians and the like could report what they were seeing as far as new infectious diseases.
They likened the concept to weather reports. The world has a network of sensors that tells meteorologists what’s happening in the atmosphere. With the data, they can warn people if a storm is coming and citizens can prepare. The public health officials wanted to do the same for infectious diseases: manmade or natural. And the far-term goal would be to do predictive analysis — just like weather forecasts.
Here is an example: let’s say a doctor in China — let’s just say Wuhan, China — noticed an unusual number of cases of patients with a new respiratory disease marked by an unusually high fatality rate. He would then input that information into a database accessible to public health officials throughout the world. Then, let’s just say, doctors in South Korea or Italy, noticed the same thing. Analysts could connect the dots and sound the alarm. Hospitals could stock up on items such as, let’s say, face masks and respirators.
What I learned at that one-day conference ended up being part of a story that ran in the November 2012 issue. NDIA members with their expertise in information technology could have a lot to offer building such a network, I reasoned, so it was worth reporting.
Let’s pull some quotes out of that 2012 story.
Harshini Mukundan, a scientist at Los Alamos National Laboratory, said diseases emerge from people, plants and animals.
“They are all interconnected, and having separate agencies monitoring each one defeats the cause.”
Laurie Garrett, an analyst at the Council on Foreign Relations, said the technical part of setting up a biosurveillance network could be completed in five to 10 years. Policies and procedures were the roadblocks. “I don’t believe we have the capacity or the will to implement” it, she said. U.S. political gridlock would prevent the idea from moving forward, she predicted.
Jason Pargas, special assistant to the DTRA director, sounded an optimistic tone. It could all come to fruition in five to 10 years. Prediction models, applied math and advanced computing would make it so.
The reporting that emerged from this conference ended up in the article, “Top Five Threats to National Security in the Coming Decade.” We ranked “Bio-Threats” as No. 1. Yikes. I don’t even want to mention what the other four were for fear of a jinx.
I would like to say that National Defense consistently reported on this issue and that we kept up a constant drumbeat for the need of a worldwide biosurveillance network, but that is not the case. Public health really isn’t in our wheelhouse.
However, two years later in 2015, we did an update online, which was reported from an Armed Forces Communications and Electronics Association homeland security conference.
No progress had been made on a biosurveillance network, Jeff Runge, former chief medical officer at DHS, said at the conference. That year saw a deadly strain of the flu that killed many children and an Ebola outbreak.
“The rate and scope and spread of the illnesses were not detected before severe consequences occurred,” he said. “These are cautionary tales underscoring the need for better biological intelligence.”
Navy Cmdr. Janka Jones, then the director of medical programs in the office of the assistant secretary of defense for nuclear, chemical and biological defense, said, “We’ve got a lot of capability. We don’t have a lot of money to build new capability.”
Transparency, openness and data sharing would be key, she said. Jones helped the Obama administration in 2012 put together the first-ever national strategy on biosurveillance. It was released in July, shortly before the NDIA Biosurveillance Conference. It included a technology roadmap on how to build the information-sharing network.
“Biosurveillance — including early detection — is one of our first lines of defense against these threats,” President Barack Obama wrote in the introduction to the strategy.
National Defense took its eye off the ball when it comes to biosurveillance — but so did a lot of people, apparently. That won’t be the case in the future.
Granted, there are policy, procedure and diplomatic hurdles to overcome, but how much funding would it have cost to set up an initial biosurveillance network — $100 million, $200 million? Seems like a paltry investment when more than $1 trillion is being spent on an economic bailout, lives have been lost and entire industries brought to their knees.”
“The General Services Administration learned some important lessons about modernizing critical back office contracting systems during the rough transition of contracting opportunity data from FedBizOpps to Beta SAM.
“We learned we needed to help the community come along with us,” in moving legacy contracting and grant management systems to GSA’s beta.SAM.gov system” – Judith Zawatsky, assistant commissioner of GSA’s Office of Systems Management Federal Acquisition Service.”
“There were frustrations that kept me up at night” after FBO was moved, said Vicky Niblett, deputy assistant commissioner of GSA’s Office of the Integrated Award Environment during the webinar. “What comforted me was that all the contracting data had migrated perfectly,” meaning what users were searching for, was there. Users had to become more familiar with the system and GSA could use their feedback to tweak the capabilities, according to Zawatsky and Niblett.
The agency responded to user demands for a return of email notifications of contract opportunities, pushing the release of the capability to the head of the agile development line, said Niblett. “Users said loudly that was extremely important. We prioritized and pushed it out sooner than planned.”
“The challenge with some legacy sites is that they had their own interfaces. Users loved them or hated them, but they knew how to use them,” said Zawatsky. GSA, she said, is listening closely with a myriad of focus groups that look at specific user and contractor “personas” that consider capabilities and needs from differing perspectives. Zawatsky also said users had become more familiar with beta.SAM’s two factor authentication requirements, as those require requirements become more common.
Beta.SAM.gov is growing, she said. It has 173,000 registered users and about 1 million average daily direct views.
Since transitioning FedBizOpps, the moving additional systems has become more considered and studied, according to Zawatsky and Niblett. The agency’s shift of the Federal Procurement Data System began a with a “soft launch” for in March that allows contractors to use beta.SAM to get FPDS Contract Data Reports, but keeps search and data on the old FPDS until the full transition is made. The limited move, said Niblett, “allows users to familiarize themselves with the new reporting tool. There is a large learning curve” between some of the functionality of the old FPDS system to beta.SAM’s, she said.
GSA plans to complete its move SAM.gov in a year, while it plans to complete moving FPDS by year’s end, said Niblett.
GSA continues to seek out user input for the process, Zawatsky and Niblett said, through direct contact and through the GSA Interact portal.”
“At least 15 Department of Veterans Affairs employees and vendors in Florida were engaged in an “elaborate” fraud scheme that cost the government “millions” since 2009, two government agencies announced in a joint press conference .”
“Declining to give the exact amount allegedly stolen or say what tipped them off, the U.S. Attorney General for the Southern District of Florida and the Department of Veterans Affairs Inspector General said people affiliated with the Miami and West Palm Beach VA clinics were charged and arrested on charges including conspiracy to commit health care fraud, committing health care fraud and bribery.
Nine of the suspects were “low-level” procurement staff, officials said. They allegedly defrauded the VA by letting vendors charge inflated prices for products or saying vendors supplied an order that was completely or partially unfilled. The employees would then receive a kickback on what the VA paid those vendors, officials said.
“This fraud scheme was clearly carried out, not only by the VA employees but deceptively with those vendors. And both of them are equally culpable in this scheme,” district Attorney General Ariana Fajardo Orshan said.
Officials also announced a separate but similar alleged fraud scheme that they suspect involved disabled veteran Lisa Anderson, 48, of Delray Beach. The attorney general has charged Anderson with false statements on her Service Disabled Veteran Owned Small Business application, accusing her of selling her preferred VA contract status to businesses she was not connected to.
OIG and AG officials praised their work in apprehending the suspects, but they called the investigation “ongoing” and did not comment on whether there will be any more arrests.
Orshan emphasized those arrested in the alleged kickback schemes were not representative of the VA at large.
“However, that does not reflect on the many, many well-intended, hard-working individuals that work for the VA medical services, she said, “and I want to clearly state that so it’s just a couple of bad apples.”
The maximum prison sentence for the charges are as follows: 10 years for conspiracy to commit health care fraud, 15 years for bribery and 20 years for falsifying records.”
UPDATE: The Number 2 – Historical “Bad Actor” in terms of government contract fines and violations cited in this “Project on Government Oversight” article earlier this year has now been awarded a $400 Million Contract for border wall construction.
Time for the competition protests; but none of them have a clean slate either.
“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”
“The past conduct of three contractors—Caddell Construction, W.G. Yates & Sons, and Fisher Sand & Gravel—should concern contracting officers and prompt stronger oversight in future contracts to ensure that these companies play by the rules.”
“While Customs and Border Protection (Border Patrol) invited four companies to design one border wall prototype, Caddell Construction and W.G. Yates each designed two—one made of concrete and the second of other materials—giving them half of the prototypes that Border Patrol assessed. Both Caddell and Yates are currently the subjects of an unreported years-long whistleblower lawsuit alleging that they, through a joint venture, fraudulently misrepresented their use of small business subcontracts for a 2009 Camp Lejeune project. The government partially intervened in the case, securing a guilty plea from the owner of the subcontractor involved—Pompano Masonry. She pleaded guilty in 2015 to lying to investigators and received a 30-month prison sentence.
The lawsuit, filed by former Pompano Masonry employee Rickey Howard, alleges that Caddell and Yates, while engaged in a $190 million construction project for the Navy at Camp Lejeune, encouraged Pompano to create a sham small business that they would then use to route Pompano’s payments through. Doing so would allow Caddell and Yates to count the work done by Pompano (a large business) as if it were being done by a small business, helping them fulfill their small business subcontracting plan. For this service, the lawsuit claims, they offered and paid Pompano an additional 2 percent of the subcontract’s almost $15 million value—over $250,000.
Aside from the creation of a fake small business that existed only on paper, Caddell and Yates appear to have regularly used “pass-through” small businesses on that project. The lawsuit alleges a dozen different instances where Caddell and Yates chose large, trusted contractors to perform the work, and then paid small businesses one to two percent of the subcontract value to act as middlemen so Caddell and Yates could meet their small business subcontracting goal of 77 percent. This resulted in some rather unusual arrangements, such as Caddell and Yates routing a $1.4 million subcontract for food service equipment through a small landscaping company called Power Mulch—for a 1 percent fee.
Don’t write Howard off as just a disgruntled employee. After leaving his job at Pompano Masonry and filing the lawsuit, Howard went to work at Harper Construction. Within a few short months, he discovered that Harper was using sham small businesses as well. A much shorter lawsuit ensued, and in June 2016, Harper Construction paid the government $5.4 million to settle those allegations. “This type of fraud siphons taxpayer dollars and takes away opportunities for legitimate small businesses for which this money was set aside,” said then-U.S. Attorney Laura Duffy in a press release.
A spokesperson for Yates responded to our questions about the case with the following statement:
“Yates Construction believes that the plaintiff’s qui tam case against it is baseless. Plaintiff’s allegations are just that—allegations—untested and prove nothing. The government declined to join the case after conducting its own inquiry into this matter. Moreover, the Navy gave Caddell-Yates an outstanding rating for the construction project at issue. Yates Construction is vigorously defending the case, and is seeking summary judgement. Yates Construction fully expects to prevail in the matter.”
As the investigation progressed, investigators found that Caddell was billing the government for time spent “mentoring” a Native American small business it subcontracted with, when in reality there was no mentoring going on. In fact, this small business, Mountain Chief Management Services, wasn’t even doing any work. Caddell was using the small business as a pass-through entity to claim incentive payments and boost their small business contracting goal statistics.
The investigation found that this wasn’t the only project in which Caddell had been found to have defrauded the government. According to a report obtained by POGO, Caddell claimed over $1.2 million from the two programs by “citing Mountain Chief as a subcontractor on various U.S. Army Corps of Engineers projects from 2003-2005.”
In 2014, after the investigation was complete and the settlement agreed to, the U.S. Army Corps of Engineers still sent the Army’s Procurement Fraud Division a recommendation to debar Caddell, according to documents obtained by POGO through FOIA. The referral asserts that “it is in the Government’s interest to debar Caddell Construction Co. … based upon the submission of numerous false statements and/or false claims to obtain payment.” Debarment—which prevents a company from extending, renewing, or bidding on government contracts—usually lasts at least three years. It would have been a major problem for Caddell, which has received over $5 billion from the federal government in the last decade. In the end, Caddell escaped debarment, receiving only a warning.
The Caddell employee deemed most responsible for the fraud, Mark Hill, pleaded guilty to lying to investigators and was debarred in 2015. His debarment will end July 1, 2018, but debarring individuals only prevents them (or a company they run) from bidding on and receiving a federal contract or grant. It does not prevent them from working on federal contracts as an employee. Despite the wrongdoing, a company news article appears to indicate that Hill remains employed with Caddell as the Director of Operations for Caddell Power, a subsidiary of Caddell Construction.
Caddell has had a previous run-in with the debarment process. In 1999, the U.S. Air Force officially proposed to debar Caddell, making them immediately ineligible for any government contracts and giving them a chance to argue against it before it became final. The details of the proposed debarment are unclear, but in the end Caddell was ineligible for just eight days.
Caddell told POGO that it does not comment on its government contracting work. Caddell also did not respond to POGO’s request to verify Mark Hill’s continued employment. However, the 2017 article showing a picture of Mark Hill accepting an award on behalf of Caddell was removed the day after the request for comment was sent.
Fisher Sand & Gravel
Fisher Sand & Gravel has a rap sheet that is too long to list here, racking up around two thousand violation notices from city, county, state, and federal regulatory bodies, many relating to the company’s disregard for air pollution standards. Completely aside from the then-owner of the company being sent to prison for tax fraud in 2009, the city of Phoenix reportedly filed 467 criminal charges against the company in 2010, stemming primarily from violations at one facility’s asphalt plant. The company ended up shutting down the offending plant a month later and paying the city at least $243,000 in fines. Early the next year it settled a lawsuit with Maricopa County for $1 million, stating that it was “relieved to finalize this settlement and to move forward with a clean slate.”
Three months later, in April 2011, the company paid $312,000 to settle a civil case brought by the State of Arizona for air and water quality violations that spanned six counties. That settlement covered issues such as illegally dumping waste into a river, operating for up to 16 hours a day instead of the permitted 3.3 hours, and having exhaust stacks that were half as high as they were required to be. Instead of requiring Fisher Sand & Gravel to pay the full amount to the state, the settlement allowed them to put two-thirds of the fine towards an Environmental Management System that would prevent future problems. In 2013, however, the state found more violations and the company was forced to pay $500,000.
Also in 2013, the Environmental Protection Agency (EPA) fined Fisher Sand & Gravel $150,000 for “failing to comply with dust mitigation regulations” at three sand and gravel producing facilities in 2010. “Some nights there was so much [dust] in the air, it looked like fog outside,” a nearby homeowner told azfamily.com. “If you took a deep breath, it would make you cough.” That fine also included a requirement to install water spray bars in and around the machinery at one Phoenix area plant to help control the dust. While the dust problems at that location appear to have been addressed, the county air-quality department issued a $2,160 citation related to dust control as recently as January 2017 over a different Phoenix facility.
Other federal bodies have fined Fisher Sand & Gravel for additional issues. The Equal Employment Opportunity Commission fined them $150,000 in 2011 for discrimination and retaliation, the EPA fined them again in 2016 for $18,654, and there are several fines from the Mine Safety and Health Administration ranging from $5,000 to $10,000 between 2008 and 2016. Azcentral.com also reports that the company has faced environmental complaints and violations in other states including Michigan and Montana.
“Fisher Sand & Gravel Fisher is a good environmental steward and we take environmental responsibility very seriously,” the company wrote in a 2018 statement to Fox News. “We complied with all orders and everything has been resolved.” Given the company’s history of recurring violations and the recent county-level citations, however, it would be wise to take these words with a grain of salt.
Fisher did not respond to POGO’s request for comment.
Contractor Misconduct Rarely Leads the Government to Meaningfully Debar Companies
Unfortunately, contractor misconduct is not rare, and the government does little to punish frequent abusers—especially when they are large companies. POGO’s Federal Contractor Misconduct Database is full of contractors that have together paid out over $100 billion for various kinds of misconduct but continue to receive hundreds of billions each year in taxpayer funds. If the government ends up awarding one of these three contractors a future contract, it would be wise to build in additional safeguards and oversight.
What future contracts they might be involved in remains unclear. The Trump Administration appears dedicated to fulfilling the campaign promise of a “big beautiful wall,” but both Congress and Mexico have so far declined to pay for it. While the recently passed appropriations bill includes $1.6 billion in funding for border security, the vast majority of that funding is specifically dedicated to additional fencing, personnel, and border security technology. None of the fencing funds can be spent on new designs (aka “the wall”), and only $38 million is allocated towards border wall “planning and design” (Section 230, starting at p. 673). That is far below the $18 billion that Border Patrol requested from Congress in January for the first phase of the wall. President Trump, however, remains committed to the project and has requested that the states deploy the National Guard to bolster security—despite the fact that the Guard is prohibited from performing civil law enforcement duties. “The Guard will provide air support, reconnaissance support, operational support, construction of border infrastructure, and logistical support,” according to an Arizona National Guard statement. Exactly how involved they will be in “border infrastructure” is unclear, although California Governor Jerry Brown made clear that “this will not be a mission to build a new wall.” Adding to the uncertainty, California yesterday rejected the Trump Administration’s proposed duties for the troops because they were too closely related to immigration enforcement.
There has been speculation that President Trump might attempt to divert military funds to build the wall, but that would be a complicated process requiring Congressional approval. It is far more likely that the Administration will simply wait and request more funding for the wall in the next appropriations bill, which is due this October.
Despite President Trump’s early statements that he will personally select the winning border wall design, the Department of Homeland Security (DHS) “does not anticipate that a single prototype design will be selected,” according to an email from Southwest Border Branch Chief Carlos Diaz. “Rather, the eight different prototypes are each anticipated to inform future border wall design standards in some capacity.” As far as the DHS is concerned, the “contract for [prototype] construction has been completed” and agency leadership is evaluating potential next steps.
When asked about the potential for military funding for the wall, White House Press Secretary Sarah Huckabee Sanders declined to provide details, instead stating that “the continuation of building the wall is ongoing, and we’re going to continue moving forward in that process.”
“The department would be lovin’ it if they could mirror some of McDonald’s supply chain strategies. “taking a page from McDonald’s, who is very good at managing and acquiring goods and services by category.”
The example of the humble two-by-four, [lumber] for which the Pentagon had 22 different acquisition contracts. “We necked it down to two contracts — $18 million in savings, which seems small, but when you have 40,000 contracting officers, those small items start to add up very quickly.”
“If the U.S. Department of Defense wants to find efficiencies and bring down waste, it should look to McDonald’s, the nominee for the department’s No. 3 job said Tuesday.
No, the department isn’t ready to drop its rifles for Big Macs, nor is it taking a side in the perpetual Great Fast Food Competition between Ronald and Col. Sanders. But according to Lisa Hershman, the acting chief management officer who on Tuesday had a confirmation hearing to permanently fill the role, the department would be lovin’ it if they could mirror some of McDonald’s supply chain strategies.
Asked how the Pentagon can trim waste during her hearing, Hershman told senators that there are best practices that can be learned from big corporations in the private sector, including “taking a page from McDonald’s, who is very good at managing and acquiring goods and services by category.”
“We have a large DoD-wide category management reform initiative underway. We are looking at everything from what type, how many contracts we have for certain goods and services,” Hershman said. She held up the example of the humble two-by-four, for which the Pentagon had 22 different acquisition contracts.
“Here’s the problem: We found that amongst those 22, several of the contracts were from the same vendor at different price points,” Hershman said. “We necked it down to two contracts — $18 million in savings, which seems small, but when you have 40,000 contracting officers, those small items start to add up very quickly.”
Several times during her hearing, Hershman drew back upon her private sector experience and expressed her belief that common-sense contracting reforms such as the two-by-four case could net the Pentagon savings. Members of the Senate Armed Services Committee asked few probing questions and largely gave the impression that Hershman should face limited, if any, opposition for the job.
Hershman formally became acting chief management officer on Dec. 1, 2018, after her predecessor was forced out of the position. But she was not nominated for the full job until August 2019.
The CMO position is not as high-profile a gig as other top Pentagon jobs, but the holder is the third-ranking official in the department, thanks to a series of congressional reforms in recent years. Capitol Hill’s intention was to empower the CMO to find efficiencies inside the Pentagon. Through February 2019, Hershman said her team found $4.4 billion in efficiencies and savings — a number she expects to grow in the future both through CMO-directed efforts and savings discovered through the Pentagon’s ongoing annual audit.”
“Citizenship and Immigration Services attributes its success — a 64% drop in its FOIA backlog in 2019 — to its new FOIA tracking and processing system, called the Freedom of Information Act Record System (FIRST).
It’s the only end-to-end system in government that handles FOIA submissions, manages them and then responds to the public online.”
“The Department of Homeland Security and one of its busiest components, Citizenship and Immigration Services, both say they’ve made notable progress on their Freedom of Information Act backlogs this year, even though they’re fielding more requests than ever.
But, like many aspects of the department, various components have their own disparate approaches, and processing and tracking systems, to handle incoming FOIA requests. A departmentwide approach, which the Government Accountability Office said is key to DHS’ attempts to address its FOIA backlog, isn’t finished yet.
CIS received more than 200,000 FOIA requests in 2019. Meckley said processing times for a CIS FOIA case are down, on average, by more than 22 minutes. She attributed the improvements to FIRST.
CIS alone handles about half of the department’s FOIA requests, which represent about a quarter of all governmentwide inquiries.
Requests to DHS represent nearly 45% of all FOIA inquiries across government.
DHS in fiscal 2019 processed nearly 430,000 FOIA requests, a 14% increase over the previous year’s total of roughly 400,000 requests, James Holzer, deputy chief FOIA officer for the department, said.
The department said it ended 2019 with a backlog of 32,500 FOIA requests, a 40% decrease over the previous year’s backlog.
DHS also has its own enterprise FOIA tracking and processing system, which six out of nine components currently use, Holzer said.
But members on the House Homeland Security Oversight, Management and Accountability Subcommittee expressed some concern that DHS components still use disparate FOIA systems.
Previously, CIS only accepted FOIA requests by mail, fax or email. Requesters received a CD in the mail with the appropriate documents, Meckley said.
Requesters using the new system can create an online account to submit and receive documents digitally.
“Early indications are that FOIA processors are almost doubling productivity,” Meckley said. “The digital request, management and delivery process will save time, improve efficiency and eliminate potential errors that can occur when manually handle paper.”
Meckley acknowledged CIS and other DHS components have vastly different lines of business, but she sees an opportunity for other pieces of the department to tap into her agency’s services.
“For us the concentration has been focusing on a technical solution that not only met yesterday’s needs but today’s needs and tomorrow’s needs,” she said. “We are in that position now. We are poised to share information about FIRST with other DHS components. I think that solution is one that is scalable.”
On occasion, the components have shared information with each other and processed FOIA requests on the other’s behalf, especially when it comes to immigration.
CIS and ICE, for example, once had a memorandum of agreement where CIS had processed certain requests for ICE.
That agreement isn’t in place today, and lawmakers questioned whether it should be.
“I don’t believe that’s been established, that there would be a significant cost savings to ICE,” Holzer said. “If we were to transfer resources from ICE to pay for CIS to process those records, it could actually impact further operations at ICE.”
The structure of FOIA within DHS has changed, he said, the new end-to-end tracking systems that agencies like CIS are building could
“When we had those memorandums between the components, it was almost necessary because the components were not able to utilize the technology that we had in place,” Holzer said. “The technologies that we currently have in place will allow the record sets to be transferred. I would assume that with a solution such as FIRST that we could grant access to other components to be able to process those records within that solution. If not then we could work with our colleagues to take a look at how we could utilize technology. But my big concern is that I do not want to take resources that are limited at ICE and have them shift it over to CIS to fund a solution that they’re not really interested in participating.”
Meckely said other agencies could easily begin to use the new CIS FOIA system. FIRST uses open source code, and the system is stored on an Amazon Web Services cloud, she said.
“If any DHS component or government agency wants us to expose that code and allow them to use that, we’re ready to have those technical conversations,” she said.”
For the Pentagon, happy days are here again (if they ever left). With a budget totaling more than $1.4 trillion for the next two years, the department is riding high, even as it attempts to set the stage for yet more spending increases in the years to come.
With such enormous sums now locked in, Secretary of Defense (and former Raytheon lobbyist) Mark Esper is already going through a ritual that couldn’t be more familiar to Pentagon watchers. He’s pledged to “reform” the bureaucracy and the spending priorities of the Department of Defense to better address the latest proposed threats du jour, Russia and China. His main focus: paring back the Pentagon’s “Fourth Estate” — an alphabet soup of bureaucracies not under the control of any of the military services that sucks up about 20% of the $700 billion-plus annual budget.
Esper’s promises to streamline the spending machine should be taken with more than the usual grain of salt. Virtually every secretary of defense in living memory has made similar commitments, with little or nothing to show for them in terms of documented savings. Far from eliminating wasteful programs, efforts pursued by those past secretaries and by Congress under similar banners have been effective in only one obvious way: further reducing oversight and civilian control of the Pentagon rather than waste and inefficiency in it.
Examples of gutting oversight under the guise of reform abound, including attempting to eliminate offices focused on closing excess military bases and sidelining officials responsible for testing the safety and effectiveness of weapon systems before their deployment. During the administration of President Bill Clinton, for instance, the slogan of the day — “reinventing government” — ended up, in Pentagon terms, meaning the gutting of contract oversight. In fact, just to repair the damage from that so-called reform and rebuild that workforce took another $3.5 billion. Gordon Adams, former associate director for national security and international affairs at the White House Office of Management and Budget, noted accurately that such efforts often prove little more than a “phony management savings waltz.”
Secretary of Defense Esper has also pledged to eliminate older weapons programs to make way for systems more suited to great power conflict. Past efforts along these lines have meant attempts to retire proven, less expensive systems like the A-10 “Warthog” — the close-air-support aircraft that protects troops in combat — to make way for the over-priced, underperforming F-35 jet fighter and similar projects.
Never mind that a war with either Russia or China — both nuclear-armed states — would be catastrophic. Never mind that more effort should be spent figuring out how to avoid conflict with both of them, rather than spinning out scenarios for fighting them more effectively (or at least more expensively). Prioritizing unlikely scenarios makes for a great payday for contractors, but often sacrifices the ability of the military to actually address current challenges. It takes the focus away from effectively fighting the real asymmetric wars the U.S. has been fighting since World War II. It leaves taxpayers with massive bills for systems that almost invariably turn out to be over cost and behind schedule. Just as an infamous (and nonexistent) “bomber gap” with the Soviet Union was used by the Pentagon and its boosters to increase military spending in the 1950s, the current hype around ultra-high-speed, hypersonic weapons will only lead to sky’s-the-limit expenditures and a new global arms race.
Esper’s efforts may end up failing even on their own narrow terms. Reforming the Pentagon is hard work, not only because it’s one of the world’s largest bureaucracies, but because there are far too many parochial interests that profit from the status quo. Under the circumstances, it matters little if current spending patterns aren’t aligned with any rational notion of what it would take to defend the United States and its allies.
A Revolving-Door World
The Department of Defense regularly claims that it has implemented “efficiencies” to ensure that every penny of your tax dollars is being wisely spent. Such efforts, however, are little more than marketing ploys designed to fend off future calls for cuts in the Pentagon’s still-ballooning budget. Here are just two recent examples of this sadly familiar story.
In September 2018, the Government Accountability Office (GAO) released a report stating that the Department of Defense had provided insufficient evidence that $154 billion in alleged “efficiency savings” from fiscal years 2012 to 2016 had been realized; the department claimed credit for them anyway.
Just this month, the GAO came to a similar conclusion regarding a proposed Pentagon reform plan that was to save $18.4 billion between fiscal years 2017 and 2020. Its report stated that the Pentagon had “provided limited documentation of… progress,” which meant the GAO “could not independently assess and verify” it. Consider that a charitable way of suggesting that the Department of Defense was once again projecting a false image of fiscal discipline, even as it was drowning in hundreds of billions of your tax dollars. The GAO, however, failed to mention one crucial thing: even if those alleged savings had been realized, they would simply have been plowed into other Pentagon programs, not used to reduce the department’s bloated budget.
Esper and his colleagues have argued that it will be different this time. In an August 2nd memo, his principal deputy, David Norquist, stated that “we will begin immediately and move forward aggressively… The review will consider all ideas — no reform is too small, too bold, or too controversial to be considered.”
Even if Esper and Norquist were, however, to propose real changes, they would undoubtedly run into serious interference within the Pentagon, not to mention from their commander-in-chief, President Donald Trump, a man determined to plough ever more taxpayer dollars into the military, and from members of Congress in states counting on jobs generated by the military-industrial complex. Inside the Pentagon, on the other hand, resistance to change will be spearheaded by officials who previously held jobs in the defense industry or hope to do so in the future. We’re talking, of course, about those who have made use of, or will make use of, the infamous “revolving door” between weapons companies and the government. Consider that the essence of the military-industrial complex in action.
Such ties start at the top. During the Trump administration, the post of secretary of defense has been passed from one former defense industry figure to another, as if it were literally reserved only for key officials from major weapons makers. Trump’s first secretary of defense, retired General James (“Mad Dog”) Mattis, came to the Pentagon straight from the board of General Dynamics, a position he returned to shortly after leaving the department. Interim Secretary Patrick Shanahan, who followed him, had been an executive at Boeing, while current Secretary Esper was Raytheon’s former chief in-house lobbyist. The Pentagon’s number three official, John Rood, similarly comes courtesy of Lockheed Martin. And the list only goes on from there.
This has been a systemic problem in Democratic and Republican administrations, but there has been a marked increase in such appointments under Donald Trump. A Bloomberg Government analysis found that roughly half of the Obama administration’s top Pentagon officials had defense contractor experience. In the Trump administration, that number has reached a startling 80%-plus.
That revolving door, of course, swings both ways. Defense executives come into government, where they make decisions that benefit their former colleagues and companies. Then, as retiring government officials, they go to work for defense firms where they can use their carefully developed government contacts to benefit their new (or old) employers. This practice is endemic. A study by the Project On Government Oversight found 645 cases in which the top 20 defense contractors hired former senior government officials, military officers, members of Congress, or senior legislative staff as lobbyists, board members, or senior executives in 2018 alone.
There is, of course, nothing new about any of this. The late Senator William Proxmire (D-WI) pinpointed the problem with the revolving door back in 1969:
“The easy movement of high-ranking military officers into jobs with major defense contractors and the reverse movement of top executives in major defense contractors into high Pentagon jobs is solid evidence of the military-industrial complex in operation. It is a real threat to the public interest because it increases the chances of abuse… How hard a bargain will officers involved in procurement planning or specifications drive when they are one or two years from retirement and have the example to look at over 2,000 fellow officers doing well on the outside after retirement?”
For his part, President Trump has repeatedly bragged about his role in promoting defense-related employment in key states, both from Pentagon budget increases and the sale of arms to repressive regimes like Saudi Arabia. In March, he held a one-hour campaign-style rally for workers at a tank plant in Lima, Ohio, at which he typically suggested that his budget increases had saved their jobs.
As for Congress, when the Army, in a rare move, actually sought to save a modest amount of money by canceling an upgrade of its CH-47 transport helicopter, the Senate struck back, calling for funding that the Pentagon hadn’t even requested in order to proceed with the program. The reason? Protecting jobs at Boeing’s Philadelphia-area factory that was scheduled to carry out the upgrades. Unsurprisingly, Trump seems fine with this congressional initiative (affecting the key battleground state of Pennsylvania), which still needs to survive a House-Senate conference on the defense bill.
The bottom line: Donald Trump is likely to oppose any changes that might have even the smallest impact on employment in states where he needs support in election campaign 2020. Defense industry consultant Loren Thompson summed up the case as follows: “We’re too close to the presidential election and nobody [at the White House] wants to lose votes by killing a program.” And keep in mind that this president is far from alone in taking such a stance. Similar reelection pressures led former President Jimmy Carter to increase Pentagon spending at the end of his term and caused the George H. W. Bush administration to reverse a decision to cancel the troubled V-22 Osprey, a novel part-helicopter, part-airplane that would later be implicated in crashes killing dozens of Marines.
“We Won’t Get Fooled Again”
What would a genuine Pentagon reform plan look like? There are areas that could easily yield major savings with sufficient political will and persistence. The most obvious of these might be the Pentagon’s employment of more than 600,000 private contractors, many of whom do jobs that could be done by government civilians for less. Cutting that work force to “only” about half a million, for example, could save more than a quarter of a trillion dollars over the next decade, as noted in a recent report by the Center for International Policy’s Sustainable Defense Task Force (of which both authors of this article were members).
Billions more could be saved by eliminating unnecessary military bases. Even the Pentagon claims that it has 20% more facilities than it needs. A more reasonable, restrained defense strategy, including ending America’s twenty-first-century forever wars, would make far more bases redundant, both at home and among the 800 or so now scattered around the planet in an historically unprecedented fashion. Similarly, the president’s obsession with creating an expensive Space Force should be blocked, given that it’s likely only to increase bureaucracy and duplication, while ensuring an arms race above the planet as well as on it.
Real reform would also mean changing how the Pentagon does business (not to speak of the way it makes war). Such savings would naturally start by simply curbing the corruption that comes from personnel in high positions who are guaranteed to put the interests of defense contractors ahead of those of taxpayers and the real needs of American security. (There are also few restrictions on former officials working for foreign governments and almost no public disclosure on the subject.) The Project On Government Oversight found hundreds of Pentagon officials leaving for defense industry jobs, raising obvious questions about whether decisions they made were in the public interest or meant to advance their own future paydays.
Real reform would close the many loopholes in current ethics laws, extend cooling-off periods between when an official leaves government and when he or she can work for an arms contractor, and make far more prominent information about when retired national security officials switch teams from government to industry (or vice versa). Unfortunately, since Esper himself has refused to pledge not to return to the world of the corporate weapons makers after his stint as secretary of defense, this sort of reform will undoubtedly never be part of his “reform” agenda.
One outcome of his initiative, however, will definitely not be money-saving in any way. It will be to boost spending on high-tech systems like missile defense and artificial intelligence on the almost laughable grounds (given the past history of weapons development) that they can provide more military capability for less money. Whether you look at the Navy’s Fordaircraft carriers — the first two costing $13.1 billion and $11.3 billion — or the Air Force’s aerial refueling tanker (which has taken nearly two decades to procure), it’s not hard to see how often vaunted technological revolutions prove staggeringly costly — far, far beyond initial estimates — yet result in smaller, less effective forces. As longtime Pentagon reformer Tom Christie has pointed out, to really change the acquisition system would require building in significantly more discipline. That would mean demonstrating the effective and reliable use of new technology through rigorous field-testing before advancing fragile weapons systems to the production stage, ensuring future maintenance and other headaches for troops in combat.
There is, in addition, a larger issue underlying all this talk of spending reform at the Pentagon. After all, Esper’s “reforms” are visibly designed to align Pentagon spending with the department’s new priority: combatting the security challenges posed by Russia and China. Start with one crucial thing: these challenges have been greatly exaggerated, both in the Trump administration’s national defense strategy and in the report of the industry-led National Defense Strategy Commission. That document, when you analyze its future math, even had the nerve to claim that the Pentagon budget would need to be boosted to nearly $1 trillion annually within the next five years, reports Taxpayers for Common Sense.
Russia has much to answer for — from its assistance to the Syrian army’s ongoing slaughter of civilians to its military meddling in the affairs of Ukraine — but the response to such challenges should not be to spend more on ships, planes, and advanced nuclear weapons, as current Pentagon plans would do. In reality, the economy and military of Russia, a shaky petro-state only passing for a great power, are already overshadowed by those of the U.S. and its NATO allies. Throwing more money at the Pentagon will do nothing to change Russian behavior in a positive fashion. Taking measures that are in the interests of both countries like renewing the New START nuclear reduction treaty and beginning new talks on curbing their massive nuclear arsenals would be extremely valuable in their own right and might also open the door to negotiations on other issues of mutual concern.
China’s challenge to the U.S is significantly more economic than military and, if those two nations wanted to make the planet a safer place, they would cooperate in addressing the threat of climate change, not launch a new arms race. Genuine reform of the Pentagon’s massive budget is urgently needed, but rest assured that Secretary of Defense Esper’s claims about implementing real changes to save taxpayer dollars while making the U.S. military more effective are the equivalent of bestseller-list Pentagon fiction. The motto of Congress, not to speak of the White House and the public, with respect to the Pentagon’s latest claims of fiscal probity should be “we won’t get fooled again.”
“The Subcommittee surveyed 26 federal agencies and found the last three government shutdowns cost taxpayers nearly $4 billion
At least $3.7 billion in back pay to furloughed federal workers, and at least $338 million in other costs associated with the shutdowns, including extra administrative work, lost revenue, and late fees on interest payments. “
“Agencies reported to the Subcommittee that the combined total of furlough days during all three shutdowns was about 14,859,144, representing an estimated 56,938 years of lost productivity for those agency employees.
These figures, however, do not include data from some of the largest government agencies, which were unable to provide complete shutdown cost estimates to the Subcommittee, including the Departments of Defense, Agriculture, Justice, and Commerce and the Environmental Protection Agency.
This report also documents the impacts that shutdowns have on important core government functions. “