Tag Archives: Government Accoutability

How The Pentagon Can Save Over $1.2 Trillion

Image: “The Fiscal Times


To reach the $1.2 trillion-plus reduction, spending cuts would come from three general areas:

  • Force structure and weapons procurement reductions.
  • Overhead and efficiencies.
  • Nuclear weapons, missile defense and space.


“The Pentagon could save more than $1.2 trillion with a number of tweaks to its spending plan for the next decade, including canceling the creation of a Space Force and nuclear weapons projects, according to a report by the Center for International Policy.

The report, “Sustainable Defense: More Security, Less Spending,” offers new strategies that challenge the National Defense Strategy by encouraging more diplomacy (specifically in regard to the Iran nuclear deal) and less military confrontation to cut costs. It also says the NDS “exaggerate[s] the challenges posed by major powers” like China and Russia.

The report offers Congress several solutions to reduce Defense Department spending in the short term, including restricting overseas contingency operations funds, cutting the Pentagon’s private contractor workforce by 15 percent, blocking plans for the Space Force, avoiding placing weapons in space and rolling back the nuclear modernization plan. Capitol Hill is in the middle of a funding debate over fiscal 2020 military spending.

The Defense Department’s top-line budget hit $691 billion in FY10 and generally decreased until FY16, when the budget saw an increase and continued since, reaching $686 billion in FY19. The White House has proposed a $750 billion budget for FY20.

Recommendations from the report call for a reduction in end strength for the Army and Marine Corps. If this approach is adopted, the Army’s active-duty force would see about a 13 percent reduction in planned end strength, from 488,000 to 426,000. The Marine Corps would see a reduction in its active infantry battalions and combat and support units, and an approximately 15 percent reduction in end strength, from 186,000 to 157,000.

The Navy would also face cuts to the current size of its fleet from about 297 ships to 264 under the report’s recommendations. This would interrupt the Navy’s goal of building a 325-ship fleet by 2028, the report adds.

The report suggests eliminating efforts to produce a new nuclear, air-launched cruise missile, known as the Long Range Standoff Weapon, which it calls “redundant.” This would save $13.3 billion over a 10-year period, the report claims. The Pentagon could also save $30 billion over 10 years by canceling plans for a new intercontinental ballistic missile.

On the U.S. nuclear strategy overall, the report recommends the country move toward “a posture of sufficiency — a large enough arsenal to deter attacks on the United States and its allies. No additional capability is needed.”

Canceling plans for a Space Force would save the department $10 billion over the same period, the report says. Plans for the Space Force were adopted by the House Armed Services Committee on Thursday during its markup of the National Defense Authorization Act. The language of the bill renames the organization Space Corps and places it under the purview of the Department of the Air Force.

The report states that the U.S. is much safer today than it once was, adding that while international terrorist organizations remain a threat, their existence does not warrant an expansion of military force.

“[T]the wars of the last 18 years — including large-scale counterinsurgency efforts, nation building, and global terrorist-chasing, as occurred in Iraq, Afghanistan, and beyond — have done more harm than good, in some cases disastrously so,” the report asserts. It suggests abandoning policies that led to war and reducing the size and geographic reach of the military to “stop unnecessarily risking the lives of U.S. troops.”

The report also claims Russia and China pose no threat to the U.S. in terms of conventional military power. Rather, the competition with those countries lies in “economic dominance (particularly with China) and diplomatic influence.”

The report says the most urgent national security risks lie in climate change, cyberattacks, global disease epidemics, and income and wealth gaps. “


The Real Versus Perceived Power Of The U.S. Presidency

Image: “Vox

STRATFOR ” By George Friedman

The American presidency is designed to disappoint.  What the winner actually can deliver depends upon what other institutions, nations and reality will allow him or her.

To achieve anything substantial, the president must create a coalition of political interests to shape decision-making in other branches of the government.”



Below are selected excerpts from a classic article by George Friedman, prior to the 2012 National Election. Considering what has occurred since, it is our hope that the content will continue bringing reality to American citizen expectations.]:


Each candidate must promise things that are beyond their power to deliver. No candidate could expect to be elected by emphasizing how little power the office actually has and how voters should therefore expect little from him. 

So candidates promise great, transformative programs.  Though the gap between promises and realities destroys immodest candidates, from the founding fathers’ point of view, it protects the republic. They distrusted government in general and the office of the president in particular.

Congress, the Supreme Court and the Federal Reserve Board all circumscribe the president’s power over domestic life. This and the authority of the states greatly limit the president’s power, just as the country’s founders intended. To achieve anything substantial, the president must create a coalition of political interests to shape decision-making in other branches of the government. Yet at the same time — and this is the main paradox of American political culture — the presidency is seen as a decisive institution and the person holding that office is seen as being of overriding importance.

The president has somewhat more authority in foreign policy, but only marginally so. He is trapped by public opinion, congressional intrusion, and above all, by the realities of geopolitics. Thus, while during his 2000 presidential campaign George W. Bush argued vehemently against nation-building, once in office, he did just that (with precisely the consequences he had warned of on the campaign trail). And regardless of how he modeled his foreign policy during his first campaign, the 9/11 attacks defined his presidency. 

Similarly, Barack Obama campaigned on a promise to redefine America’s relationship with both Europe and the Islamic world. Neither happened. It has been widely and properly noted how little Obama’s foreign policy in action has differed from George W. Bush’s. It was not that Obama didn’t intend to have a different foreign policy, but simply that what the president wants and what actually happens are very different things.

The power often ascribed to the U.S. presidency is overblown. But even so, people — including leaders — all over the world still take that power very seriously. They want to believe that someone is in control of what is happening. The thought that no one can control something as vast and complex as a country or the world is a frightening thought. Conspiracy theories offer this comfort, too, since they assume that while evil may govern the world, at least the world is governed. There is, of course, an alternative viewpoint, namely that while no one actually is in charge, the world is still predictable as long as you understand the impersonal forces guiding it. This is an uncomfortable and unacceptable notion to those who would make a difference in the world. For such people, the presidential race — like political disputes the world over — is of great significance.

Ultimately, the president does not have the power to transform U.S. foreign policy. Instead, American interests, the structure of the world and the limits of power determine foreign policy.

In the broadest sense, current U.S. foreign policy has been in place for about a century. During that period, the United States has sought to balance and rebalance the international system to contain potential threats in the Eastern Hemisphere, which has been torn by wars. The Western Hemisphere in general, and North America in particular, has not. No president could afford to risk allowing conflict to come to North America.

At one level, presidents do count: The strategy they pursue keeping the Western Hemisphere conflict-free matters. During World War I, the United States intervened after the Germans began to threaten Atlantic sea-lanes and just weeks after the fall of the czar. At this point in the war, the European system seemed about to become unbalanced, with the Germans coming to dominate it. In World War II, the United States followed a similar strategy, allowing the system in both Europe and Asia to become unbalanced before intervening. This was called isolationism, but that is a simplistic description of the strategy of relying on the balance of power to correct itself and only intervening as a last resort.

During the Cold War, the United States adopted the reverse strategy of actively maintaining the balance of power in the Eastern Hemisphere via a process of continual intervention. It should be remembered that American deaths in the Cold War were just under 100,000 (including Vietnam, Korea and lesser conflicts) versus about 116,000 U.S. deaths in World War I, showing that far from being cold, the Cold War was a violent struggle. 

The decision to maintain active balancing was a response to a perceived policy failure in World War II. The argument was that prior intervention would have prevented the collapse of the European balance, perhaps blocked Japanese adventurism, and ultimately resulted in fewer deaths than the 400,000 the United States suffered in that conflict. A consensus emerged from World War II that an “internationalist” stance of active balancing was superior to allowing nature to take its course in the hope that the system would balance itself. The Cold War was fought on this strategy.

Between 1948 and the Vietnam War, the consensus held. During the Vietnam era, however, a viewpoint emerged in the Democratic Party that the strategy of active balancing actually destabilized the Eastern Hemisphere, causing unnecessary conflict and thereby alienating other countries. This viewpoint maintained that active balancing increased the likelihood of conflict, caused anti-American coalitions to form, and most important, overstated the risk of an unbalanced system and the consequences of imbalance. Vietnam was held up as an example of excessive balancing.

The counterargument was that while active balancing might generate some conflicts, World War I and World War II showed the consequences of allowing the balance of power to take its course. This viewpoint maintained that failing to engage in active and even violent balancing with the Soviet Union would increase the possibility of conflict on the worst terms possible for the United States. Thus, even in the case of Vietnam, active balancing prevented worse outcomes. The argument between those who want the international system to balance itself and the argument of those who want the United States to actively manage the balance has raged ever since George McGovern ran against Richard Nixon in 1972.

If we carefully examine Obama’s statements during the 2008 campaign and his efforts once in office, we see that he has tried to move U.S. foreign policy away from active balancing in favor of allowing regional balances of power to maintain themselves. He did not move suddenly into this policy, as many of his supporters expected he would. Instead, he eased into it, simultaneously increasing U.S. efforts in Afghanistan while disengaging in other areas to the extent that the U.S. political system and global processes would allow.

Obama’s efforts to transition away from active balancing of the system have been seen in Europe, where he has made little attempt to stabilize the economic situation, and in the Far East, where apart from limited military repositioning there have been few changes. Syria also highlights his movement toward the strategy of relying on regional balances. The survival of Syrian President Bashar al Assad’s regime would unbalance the region, creating a significant Iranian sphere of influence. Obama’s strategy has been not to intervene beyond providing limited covert support to the opposition, but rather to allow the regional balance to deal with the problem. Obama has expected the Saudis and Turks to block the Iranians by undermining al Assad, not because the United States asks them to do so but because it is in their interest to do so.

Obama’s perspective draws on that of the critics of the Cold War strategy of active balancing, who maintained that without a major Eurasian power threatening hemispheric hegemony, U.S. intervention is more likely to generate anti-American coalitions and precisely the kind of threat the United States feared when it decided to actively balance. In other words, Obama does not believe that the lessons learned from World War I and World War II apply to the current global system, and that as in Syria, the global power should leave managing the regional balance to local powers.

As I have argued from the outset, the American presidency is institutionally weak despite its enormous prestige. It is limited constitutionally, politically and ultimately by the actions of others. Had Japan not attacked the United States, it is unclear that Franklin Roosevelt would have had the freedom to do what he did. Had al Qaeda not attacked on 9/11, I suspect that George W. Bush’s presidency would have been dramatically different.

The world shapes U.S. foreign policy. The more active the world, the fewer choices presidents have and the smaller those choices are. Obama has sought to create a space where the United States can disengage from active balancing. Doing so falls within his constitutional powers, and thus far has been politically possible, too. But whether the international system would allow him to continue along this path should he be re-elected is open to question. Jimmy Carter had a similar vision, but the Iranian Revolution and the Soviet invasion of Afghanistan wrecked it. George W. Bush saw his opposition to nation-building wrecked by 9/11 and had his presidency crushed under the weight of the main thing he wanted to avoid.

Presidents make history, but not on their own terms. They are constrained and harried on all sides by reality. In selecting a president, it is important to remember that candidates will say what they need to say to be elected, but even when they say what they mean, they will not necessarily be able to pursue their goals. The choice to do so simply isn’t up to them. The degree to which the winner matters, however, is unclear, though knowing the inclinations of presidential candidates regardless of their ability to pursue them has some value.

In the end, though, the U.S. presidency was designed to limit the president’s ability to rule. He can at most guide, and frequently he cannot even do that. Putting the presidency in perspective allows us to keep our debates in perspective as well.”

STRATFOR Geopolitical Weekly – July 31, 2012


George Friedman is a geopolitical forecaster and strategist on international affairs. He is the founder and chairman of Geopolitical Futures, an online publication that analyzes and forecasts the course of global events. Prior to founding Geopolitical Futures, Friedman was chairman of Stratfor, the private intelligence publishing and consulting firm he founded in 1996.


What Angers A Combat Veteran And Retired Defense Industry Contracts Manager About Warfare Today?

Image: “Project On Government Oversight

By Ken Larson

The Government is tolerating massive abuses in the Military Industrial Complex (MIC).

Large defense companies have utilized the threat of war and self-fulfilling prophesies to promote engagements by our nation in several countries over the last two decades. The largest corporations pay more in lobbying costs each year than they pay in taxes.


There have been two major factors in the U.S. approach to undeclared warfare:

1. The motives of the U.S. and International Military Industrial Complexes, USAID and other western USAID counterparts in fostering continued warfare during this period, netting billions in sales of weapons to the war fighters and massive construction and redevelopment dollars for international companies who often operated fraudulently and fostered waste, looting and lack of funds control.

It is common knowledge that many of these corporations spend more each year in lobbying costs than they pay in taxes and pass exorbitant overhead and executive pay cost on to the tax payer in sales, thus financing their operating personnel riches while remaining marginally profitable to their stockholders.

I watched this from the inside of many of these companies for 36 years. Here is my dissertation on that subject. You can read it on line at:

Odyssey of Armaments | Ken Larson – Academia.edu

Here is an example of how the lobbying and behind the scenes string pulling worked:

CorpWatch : US: Lockheed Stock and Two Smoking Barrels

2. The complete lack of cultural understanding between U.S. and Western decision makers and the middle east cultures they were trying to “Assist” by nation building.

The only real understanding that existed during the period was in the person of General Schwarzkopf who spent much of his youth in the Middle East with his father who was an ambassador to Saudi Arabia. He was fascinated by the Arab culture, commanded their respect and, like Eisenhower, led a coalition during the Gulf War. He then astutely recommended no occupation of Iraq, went home and stayed out of government. Norman, like Ike, knew the power of the MIC and he wanted no part of it.

The U.S Tax payer has funded billions in USAID and construction projects in Iraq and wasted the money due to a lack of cultural understanding, fraud and abuse. POGO documents many:


There is history repeating itself here – much like Vietnam the above two factors are deeply at play with the lack of astute learning in our government as we look back over our shoulder.

We must come to the understanding, like a recent highly respected war veteran and West Point Instructor has, that military victory is dead.


“Victory’s been defeated; it’s time we recognized that and moved on to what we actually can accomplish. “


“In 1994 Congress passed legislation requiring every federal agency to be auditable.

Since then every agency has complied—except for the Department of Defense.

“We have known for many years that the Department’s business practices are archaic and wasteful, and its inability to pass a clean audit is a longstanding travesty,” Chairs John McCain (R-AZ) and Mac Thornberry (R-TX) of the Senate and House Armed Services Committees said in a joint statement. “The reason these problems persist is simple: a failure of leadership and a lack of accountability.”

The Department’s… inability to pass a clean audit is a longstanding travesty.

Pentagon Fails Audit and Nobody in Washington is Surprised

Increasing Pentagon spending under these circumstances is the opposite of fiscal responsibility. In fact, giving the Pentagon billions and finding out why later is bad budgeting.

Both the Republican and Democratic party platforms have included the need to audit the Pentagon, and Congress should resist calls to give more money to an agency they know to be irresponsible with taxpayer dollars.

Image: POGO


Ken Larson has over 40 years in the Defense Industrial Complex. He is a Veteran of 2 tours in the US Army Vietnam. He subsequently spent over 30 years in federal government program and contract management and 10 years in small business consulting.

Transparency Advocate Uses FOIA To Break Loose Report on Pentagon 9 Contractor Debarment/Suspension

Image: DOD


“It took a transparency advocate using a Freedom of Information Act request, but the Defense Department last week released a congressionally mandated report on the extent of criminal contractor fraud, naming nine firms that were suspended or debarred.


“The four-page report covering fiscal year 2013 through 2017 was sent to lawmakers in December, as required under the 2018 National Defense Authorization Act, but was released to FOIA requester Steven Aftergood, who writes the Secrecy News blog for the Federation of American Scientists.

Investigators at the Defense Criminal Investigative Service and the Defense Department Office of Inspector General found that during the five-year period, there were 1,059 cases resulting in criminal convictions of 1,087 defendants. “The cases reported involved 678 defendants as individual persons and 409 defendants as business entities,” the Pentagon said. “As a result of the criminal convictions, a total of $368,670,055 was recovered in fines and penalties; $370,194,702 was recovered through restitution; and $53,361,358 was recovered through forfeiture of property.”

There were 443 cases resulting in civil judgments or settlements involving 546 defendants or respondents. The cases involved 111 individuals and 435 business entities subject to civil judgments or settlements that totaled $5,858,180,290.

The nine contractor entities whose employees faced criminal conviction are: Advanced Solutions for Tomorrow, Inc.; B&J Multi Service Corporation; Matthews Manufacturing, Inc.; Nova Datacom, LLC; NP Precision, Inc.; Quantell, Inc.; Tab Construction Company, Inc.; Megabite Electronics, Inc.; and Skedco, Inc.

In total, 168 entities or individual contractors were indicted, fined or convicted of procurement fraud.

The newly released report was reviewed for technical issues by the Defense-wide Procurement Fraud Working Group.

The IG, which produced an updated summary of specific procurement fraud cases in its most recent semi-annual report, wrote, “Procurement fraud includes, but is not limited to, cost and labor mischarging, defective pricing, price fixing, bid rigging, and defective and counterfeit parts. The potential damage from procurement fraud extends well beyond financial losses. This crime poses a serious threat to the DoD’s ability to achieve its objectives and can undermine the safety and operational readiness of the warfighter.”

As Aftergood noted, a similar report was released in 2011 at the request of Sen. Bernie Sanders, I-Vt.

Neil Gordon, an investigator with the nonprofit Project on Government Oversight, which has long tracked contractor fraud, told Government Executive “POGO was disappointed that this fraud report was much less detailed than the one the Inspector General released in 2011. This one lacks the detailed charts and tables, names fewer contractors, and just generally lacks any descriptive detail. Overall, it once again serves to remind that there are no consequences for defense contractors who commit fraud. It boggles the mind how willing the Defense Department is to award taxpayer dollars to the same bad actors again and again.”


Military Victory is Dead




“Victory’s been defeated; it’s time we recognized that and moved on to what we actually can accomplish.

We’ve reached the end of victory’s road, and at this juncture it’s time to embrace other terms, a less-loaded lexicon, like “strategic advantage,” “relative gain,” and “sustainable marginalization.”

A few weeks back, Colombian President Juan Manuel Santos and Harvard Professor Steven Pinker triumphantly announced the peace deal between the government of Columbia and the Revolutionary Armed Forces of Columbia (FARC). While positive, this declaration rings hollow as the exception that proves the rule – a tentative treaty, however, at the end, roughly 7,000 guerrillas held a country of 50 million hostage over 50 years at a cost of some 220,000 lives. Churchill would be aghast: Never in the history of human conflict were so many so threatened by so few.

One reason this occasion merited a more somber statement: military victory is dead. And it was killed by a bunch of cheap stuff.

The term “victory” is loaded, so let’s stipulate it means unambiguous, unchallenged, and unquestioned strategic success – something more than a “win,” because, while one might “eke out a win,” no one “ekes out a victory.” Wins are represented by a mere letter (“w”); victory is a tickertape with tanks.

Which is something I’ll never see in my military career; I should explain. When a government has a political goal that cannot be obtained other than by force, the military gets involved and selects some objective designed to obtain said goal. Those military objectives can be classified broadly, as Prussian military theorist Carl von Clausewitz did, into either a limited aim (i.e. “occupy some…frontier-districts” to use “for bargaining”), or a larger aim to completely disarm the enemy, “render[ing] him politically helpless or military impotent.” Lo, we’ve arrived at the problem: War has become so inexpensive that anyone can afford the traditional military means of strategic significance – so we can never fully disarm the enemy. And a perpetually armed enemy means no more parades (particularly in Nice).

Never in the history of human conflict were so many so threatened by so few.

It’s a buyer’s market in war, and the baseline capabilities (shoot, move, and communicate) are at snake-belly prices. Tactical weaponry, like AK-47s are plentiful, rented, and shipped from battlefield to battlefield, and the most lethal weapon U.S. forces encountered at the height of the Iraq War, the improvised explosive device, could be had for as little as $265. Moving is cost-effective too in the “pickup truck era of warfare,” and reports on foreign fighters in Syria remind us that cheap, global travel makes it possible for nearly anyone on the planet to rapidly arrive in an active war zone with money to spare. Also, while the terror group Lashkar-e-Taiba shut down the megacity Mumbai in 2008 for less than what many traveling youth soccer teams spend in a season, using unprotected social media networks, communication has gotten even easier for the emerging warrior with today’s widely available unhackable phones and apps. These low and no-cost commo systems are the glue that binds single wolves into coordinated wolf-packs with guns, exponentially greater than the sum of their parts. The good news: Ukraine can crowdfund aerial surveillance against Russian incursions. The less-good news: strikes, like 9/11, cost less than three seconds of a single Super Bowl ad. With prices so low, why would anyone ever give up their fire, maneuver, and control platforms?

All of which explains why military victory has gone away. Consider the Middle East, and the recent comment by a Hezbollah leader, “This can go on for a hundred years,” and his comrade’s complementary analysis, that “as long as we are there, nobody will win.” With such a modestly priced war stock on offer, it’s no wonder Anthony Cordesman of the Center for Strategic and International Studies agrees with the insurgents, recently concluding, of the four wars currently burning across the region, the U.S. has “no prospect” of strategic victory in any. Or that Modern War Institute scholar Andrew Bacevich assesses bluntly, “If winning implies achieving stated political objectives, U.S. forces don’t win.” This is what happens when David’s slingshot is always full.

The guerrillas know what many don’t: It’s the era, stupid. This is the nature of the age, as Joshua Cooper Ramos describes, “a nightmare reality in which we must fight adaptive microthreats and ideas, both of which appear to be impossible to destroy even with the most expensive weapons.” Largely correct, one point merits minor amendment – it’s meaningless to destroy when it’s so cheap to get back in the game, a hallmark of a time in which Wolverine-like regeneration is regular.

This theme even extends to more civilized conflicts. Take the Gawker case: begrudged hedge fund giant Peter Thiel funded former wrestler Hulk Hogan’s lawsuit against the journalistic insurrectionists at Gawker Media, which forced the website’s writers to lay down their keyboards. However, as author Malcolm Gladwell has pointed out – Gawker’s leader, Nick Denton, can literally walk across the street, with a few dollars, and start right over. Another journalist opined, “Mr. Thiel’s victory was a hollow one – you might even say he lost. While he may have killed Gawker, its sensibility and influence on the rest of the news business survive.” Perhaps Thiel should have waited 50 more years, as Columbia had to, to write his “victory” op-ed? He may come to regret the essay as his own “Mission Accomplished” moment.

True with websites, so it goes with warfare. We live in the cheap war era, where the attacker has the advantage and the violent veto is always possible. Political leaders can speak and say tough stuff, promise ruthless revenge – it doesn’t matter, ultimately, because if you can’t disarm the enemy, you can’t parade the tanks.”

Military Victory is Dead


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Federal Contractors Describe ‘Insanity And Uncertainty’ During Government Shutdown




Contractors largely said the most recent lapse was marked by tough decisions, confusion and a lack of communication and inconsistent guidance from the government.

A few contractors used words such as “abominable, insanity and uncertainty” to describe the experience. But all of them said the impacts of the recent shutdown extended well past 35 days.”


“The longest government shutdown in U.S. history prompted some lawmakers to optimistically suggest Congress should find a way to prevent such an event from ever happening again.

But the prospects of eliminating government shutdowns for good are unlikely, at least at this point, leaving Congress to find piecemeal solutions to alleviate the impacts ahead of a future lapse in appropriations.

The House Oversight and Reform Government Operations Subcommittee on Monday heard stories from nearly a dozen federal contractors, who described how the 35-day government shutdown impacted their businesses and employees. 

Impacts on contractor employees, revenue

For Leidos, a Fortune 500 company, 893 of its employees had no or limited work to perform during the government shutdown, because they were on contracts for closed agencies, CEO Roger Krone told the subcommittee.

The company lost $14 million in revenue during those 35 days and experienced a delay in payments on outstanding invoices, which totaled about $18 million.

Leidos’ work on 22 programs came to a halt during the government shutdown, which impacted about 200 of its subcontractors, Krone said.

It also allowed those employees to advance paid leave hours up to a balance of negative 80 hours. Nearly 400 Leidos employees used up all of their vacation time and then some.

“It will take them years to build back that base of paid time off that they had prior to the shutdown,” Krone said during the subcommittee’s field hearing at George Mason University.

In addition, Leidos launched a special relief initiative to allow other employees to donate paid time off to their colleagues impacted by the government shutdown. More than 50 employees said they were in state of extreme financial hardship and needed additional assistance. These employees received a grant of $2,500.

“If the shutdown were to have continued any longer, we anticipated receiving another 100 requests each week for assistance,” Krone said.

Leidos also set up specific team to redeploy impacted employees to open positions on contracts for agencies who weren’t impacted by the government shutdown.

But some contractors couldn’t redeploy their employees to work on other contracts that weren’t impacted by the shutdown, because that work required a specific security clearance their employees didn’t have, or it would have simply taken too long to receive those credentials.

Citizant, a small business that employs 180 professionals and supports the IRS, DHS and the departments of Defense and Justice, couldn’t redeploy its 35 employees who were impacted by the government shutdown to other work.

The company did continue to pay its employees during the shutdown, but that decision came at a cost.

“When your only customer doesn’t pay you for nearly four months and you’ve reached your company’s borrowing capacity, you face the dire prospect as a business owner to file for bankruptcy or sell off parts of your business for pennies on the dollar in order to pay your employees,” Alba Alemán, Citizant’s CEO, said. “We were within days of having to make that decision.”

Delayed invoices, slow to restart work

Outstanding invoices piled up until March, which put Citizant $4 million in debt. Alemán said her company also maxed out its borrowing capacity and put off paying its own vendors until April.

Other companies have also experienced a delay in receiving payment for outstanding invoices after the government shutdown, said David Berteau, president and CEO of the Professional Services Council.

“As of two weeks ago, we still had member companies who had not had invoices paid from work done before the shutdown. Those invoices were still being reviewed and processed. That goes back to invoices filed before Dec. 21 for work done and paid for before Dec. 21. That’s not common, but it’s not out of the question.”

Conflicting guidance

Confusion reigned large during the government shutdown for many of the contractors.

Advanced Concepts and Technology (ACT 1) had two large contracts impacted by the shutdown at the Department of Homeland Security.

One contract was up for year-long option during lapse. The contract expired during the government shutdown, and the department didn’t have a contracting officer available to execute the option.

“They weren’t able to execute our option, so we basically moved off contract and couldn’t show up in the offices,” said Michael Niggel, the company’s CEO. “Our customer was frustrated with us because we weren’t there and other contractors were. They had funded contracts, but we did not.”

Now, ACT 1 has heard two different legal opinions from DHS about what should happen next.

Rep. Gerry Connolly (D-Va.), the subcommittee’s chairman, suggested the contractors, led by PSC, develop a list of simple solutions that could resolve these challenges ahead of future shutdowns.

“Certainly one of them is to have some kind of provision in law that says during a shutdown, the expiration is on ice, so you don’t lose the contract simply because the contracting officers aren’t there,” Connolly said.

The contractors also suggested Congress consider a specific provision that allows work on a specific contract to automatically restart once the lapse in appropriations ends — as well as other measures to provide more clarity on stop work orders altogether.

“The head of procurement at DHS specifically sent a memo to all contracting officers saying unless you issue or your contractor is issued a stop work order, and as long as you don’t need guidance from the government to keep doing your job, leave it alone, walk away and let them keep doing their jobs,” Alemán said. “The problem is they sent the notice the day after the shutdown. They were no longer able to read their emails, so they didn’t know that. They shut us down temporarily. We got a copy of the memo because one customer that was working sent it to us. We sent it to [DHS] and they logged in and said, ‘Yup, keep working. You’re not on a stop work order.’”

More clarity on unemployment benefits

Just as many federal employees weren’t clear if they would be eligible to receive unemployment benefits during the government shutdown, federal contractors had similar questions.

“Most of our members were too confused,” said Ed Grabowski, a local president for the International Association of Machinists and Aerospace Workers union. “Were they eligible for it because they were furloughed and they didn’t actually receive a lay off notice? So they weren’t astute enough to [know] how to apply. If I do take personal leave time, am I still entitled to collect unemployment compensation? … We had a problem with communication.”

Members of the International Association of Machinists and Aerospace Workers are helicopter pilots, lab technicians and crane operators for agencies like NASA.

“This confusion at least, it seems like we could help eliminate that,” said D.C. Del. Eleanor Holmes Norton. She, along with Reps. Don Beyer (D-Va.) and Jennifer Wexton (D-Va.) said there were opportunities for Congress to provide more clarity ahead of future lapses.

Contractors and other businessmen who were affected by the shutdown said the lapse had an impact on their staff and their ability to recruit new talent.

Wesley Ford, president of TKI Coffee, said he lost a significant amount of revenue during the government shutdown. His store is located near several agencies who were closed in January, and explicitly decided to lay off 40 percent of his staff during the shutdown so they could receive unemployment benefits.

At least 35 security officers who worked for one of the shuttered Smithsonian museums during the government shutdown quit, said Jaime Contreras, vice president of a Service Employees International Union (SEIU) local in the national capital region.

And Alemán said several of the senior-level DHS employees that Citizant worked with on their contracts left during the government shutdown.

Some of PSC’s member companies told Berteau their recruits had canceled interviews during the government shutdown.

“They’ll never get that back,” he said.”

Alaska Company Pays $2 Million in Army Corps of Engineers Bribery And Kickback Suit


Photo by: LM Otero


“Court records indicate that from 2008 to 2009, three then-KIC employees unlawfully paid James G. Tuskan, a former worker with the U.S. Army Corp of Engineers.

James Tuskan pleaded guilty to conspiracy to defraud the U.S. government and was later sentenced to 15 months in prison. Christine Hayes and Anthony Acri pleaded guilty to conspiracy to commit wire fraud, with each receiving a five-year prison sentence. “


“An Alaska company and its subsidiary have paid more than $2 million to settle a lawsuit filed by the federal government that accused the company of paying kickbacks and bribes to secure government contracts at an El Paso Army post, officials said.

Kikiktagruk Inupiat Corp. and KIC Development LLC agreed to the $2,025,000 settlement last month, the El Paso Times reported. A federal court complaint shows the scheme involved a construction work contract at Fort Bliss that was part of a “$3 billion effort to transform” the base.

The scheme was revealed in 2010 after a KIC worker reported the alleged crimes committed by the company’s vice presidents Anthony Acri and Christine Hayes, as well as project manager Earl Hall, according to court documents and officials with the U.S. Attorney’s Office for the Western District of Texas.

The bribes included airline flights, money for hotels and vacations, and payments to Tuskan’s family.

Court documents show some of the bribes happened prior to Tuskan supposedly arranging for the Army Corps in Fort Worth to award KIC with the contract exceeding $2 million in 2009. KIC was subsequently awarded a $15 million contract to provide design, construction work, repairs and renovations to two buildings at Fort Bliss.”


Federal Government Announces New Program For Contractor Discretionary Suspensions And Debarment

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U.S. DEPARTMENT OF LABOR – Date April 2, 2019 – Release Number 19-586-NAT

“Discretionary suspensions and debarments make individuals or organizations ineligible for federal contracting and transactions with the federal government typically for up to 12 months for a suspension and up to three years for a debarment.

The pilot program’s goal is to reduce the processing time on discretionary suspension and debarment actions from months to days through increased efficiency and sharing of information based on indictments or convictions.


The U.S. Department of Labor announced a new pilot program for discretionary suspensions and debarments to ensure accountability and protect the federal government from doing business with those who engage in inappropriate or illegal condut.

The pilot program involves the Department’s Office of Inspector General (OIG) including additional information in its referrals to the Office of the Assistant Secretary for Administration and Management (OASAM) that will allow decisions to be made faster than ever before.

This pilot program builds on recent steps taken by the Department to enhance its discretionary suspension and debarment efforts in the last few years, including increased coordination and collaboration with the OIG. Under these efforts, discretionary suspensions increased from a total of two during the seven years of Fiscal Year (FY) 2010 through FY2016 to 29 during FY2017-FY2018. Discretionary debarments spiked from one during FY2010-FY2016 to 32 during FY2017-FY2018. In FY2018, the OIG referred a record number of 156 individuals and organizations to OASAM for review. In just the first quarter of FY2019, the Department has issued 32 discretionary suspensions and five discretionary debarments. The pilot program preserves the due process and fairness protections for the entities involved.

“Launching this pilot program will help to protect resources from fraud, waste, and abuse – faster than ever before,” said U.S. Secretary of Labor Alexander Acosta. “Taxpayer resources will be better protected by streamlining the process and improving the use of information from indictments and convictions that result from the work of the Office of Inspector General. Given the Department of Labor’s commitment and duty to be a good steward of taxpayer resources, this pilot program is a clear reminder that the Department requires those conducting business with the federal government to be responsible and act with honesty and integrity.”

The pilot program will be in effect from April 2019 to April 2020. 

The pilot program does not affect mandatory suspensions and debarments that are set by law and result in an automatic removal from being able to participate in transactions.”

Agency Office of the Secretary Office of the Assistant Secretary for Administration & ManagementDate April 2, 2019Release Number 19-586-NATContact: Megan SweeneyPhone Number 202-693-4661Email sweeney.megan.p@dol.gov”


DOD Audit Uncovers Millions Of Dollars In Unaccounted-For Spare Parts

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“The Defense Department is just starting its second year of full-scale financial audits, and it’s likely to take many more before those efforts yield a clean opinion.

In the first year of the full-scope examination, auditors issued more than 170 separate findings and recommendations detailing the military services shortcomings in tracking their small-item inventory and real estate. “


“But the process is already having at least one beneficial effect: It’s pushed the military services to account for tens of millions of dollars in government property they’d lost track of.

David Norquist, DoD’s CFO and comptroller, said progress along those lines has already delivered concrete proof for why the audit is not merely a paperwork drill.

“We discovered there are certain facilities where what they thought they had in inventory did not match what they had in inventory. And if your responsibility is spare parts for airplanes, the accuracy of that inventory matters,” he told the Senate Armed Services Committee last week.

One example was how, at Utah’s Hill Air Force Base, a stockpile of missile motors was erroneously listed as unserviceable even though they were in perfectly good condition. Putting them back into circulation instead of ordering new ones saved the Air Force $53 million.

“In other places, if you go to Osan and Kadena [air bases in Japan], they had 14,000 munitions worth $2.2 billion, and 100 percent were accounted for — not a single exception,” Norquist said. “What we’ve learned is there are some places that are doing this quite well, and there are others where we need to help them fix their processes, but the commanders in the field recognize the direct connection to mission and readiness. They saw the tangible value, and I think as we move forward, the accuracy of the data and adopting more businesslike practices will be tremendously helpful.”

Facilities ‘no one knew existed’

Instances of bad or missing data about entire warehouses worth of parts came up more than once during the course of the 2019 audit.

Thomas Modly, the undersecretary of the Navy, said the Navy found something similar when its auditors began examining a facility in San Diego.

“When we went out and actually started counting inventory and understanding where our stuff was, they found a warehouse that no one knew existed, and it had $26 million worth of parts for the E-2 and the F-18,” he said. “It was not categorized. It did not sit on any inventory system that we had in the whole Department of the Navy. Once that was identified, we were able to requisition $19 million worth of parts to aircraft that were waiting for them and were down because we didn’t even know we had those parts. This is a serious problem for us that we really have to get after, because at the end of the day, it impacts our ability to perform the mission, and our costs.”

The DoD Inspector General reported similar issues in its summary of the 2019 audit findings. More than 100 Blackhawk helicopter blades that were listed as available for use, but that were actually damaged. Fuel injectors stored in warehouses with no documentation to show which military service owned them. Entire facilities that had been demolished years ago, but are still listed as active on the military’s property books.

The IG reported 20 overall material weaknesses after the first audit, and then refined the list down to six that auditors thought were most concerning. Two of the six had to do with property — one encompassed spare parts and other inventory, while the other dealt with bigger-ticket items like real estate.

“We’ve gone out and said, ‘Give us a list of a certain asset and how many you have and where they’re located.’ And when we go, we either find that they have more than they thought, or the ones on their lists don’t exist,” said Carmen Malone, the deputy assistant inspector general for audit. “If you have something in your inventory records that actually can’t be used, you’re not going to order something, because you think you already have it. From an inventory standpoint, that is a big deal.”

Malone said one of the reasons the IG considers the property issue so serious is that it has a direct bearing on military readiness.

“It’s not just from a financial statement standpoint,” she said. “We are out talking to the everyday operating people and making sure that they understand that what they do impacts not just the financial statements. This information will be used as a central location for decision makers across the department from a readiness and logistics standpoint as well. If the information is accurate for financial statements, it’s going to be accurate for the decision makers, which ultimately affects the operations and readiness of the department.”

At last week’s hearing, Norquist declined to predict when the department will finally earn a clean opinion on its full financial statement, but he said he expected that either the Army or the Marine Corps would pass an audit of a small portion of their individual statements — namely,  their working capital funds — within the “next couple years.”

But Modly said his department has major, systemic challenges it still needs to solve with its accounting systems before audit passage is a reasonable probability — at least on an ongoing, repeatable basis.

“We have nine current general ledger systems. They’re not connected, and they create all kinds of disparities in our ability to truly understand our financial information,” he said. “We have business systems that are even more complicated that require interfaces that cause breaks in data security. Because of all those problems, we’re doing a lot of estimating, a lot of hand-jamming of information that most modern industrial corporations never have to do. Most modern industrial corporations can push a button and generate a financial report. We are not even close to that, and we have to get better.”