Contracting Oversight and Transparency: A Follow-Up On the Bailout
Mandy Smithberger | Project On Government Oversight
Before the Emergency Economic Stabilization Act of 2008 (AKA the ESSA, and more commonly referred to as “the bailout”) passed, Neil raised concerns about whether there would be enough oversight of contractors used in the effort. In particular, he was concerned about the Treasury Secretary being able to waive the Federal Acquisition Regulations (FAR). Documents released by the Treasury Department today indicate that while services may be obtained through FAR procurement contracts, the need for fast action means that “Treasury anticipates that a number of contracts will be awarded through other than ”http://www.pogo.org/p/contracts/cl-080331-competition.html">full and open competition." It seems like lack of applicants certainly won’t be the problem.
United States Department of Treasury
More noteworthy in the Treasury documents, however, are the interim conflict of interest guidelines. While many of the provisions provide important ethical protections – though enforcement mechanisms seem to be lacking, so they leave something to be desired – one gets the distinct impression that there is more concern for protecting proprietary information and business interests than taking advantage of the situation to rip off taxpayers:
EESA contracts raise potential for “impaired objectivity” Conflicts of Interests (COIs). Under such COIs, the contractor’s judgment or objectivity may be impaired due to the fact that the substance of the contractor’s performance has the potential to affect other interests of the contractor. EESA contractors may also face potential COIs if they obtain access to sensitive, non-public information (belonging to Treasury or to third parties) while performing the contract. To address this latter type of COI, it may be necessary to restrict the disclosure of such information or to include restrictions on the dissemination of information within the contractor’s organization. Lastly, contractor employees are not always subject to the same ethical restrictions that are imposed by law on Federal Government employees. Therefore, EESA contracts may create a potential for personal COIs involving individual employees of a contractor.
Still, the response to the financial crisis does include an important transparency measure. The Securities and Exchange Commission (SEC) announced this afternoon that it will conduct a round table tomorrow “on more transparent disclosure to address lessons of [the] current credit crisis.”