There’s an outfit called the General Services Administration (GSA) that’s been around since Harry Truman signed the legislation in 1949. It was organized to buy pencils and desks and ‘general services’ for the federal bureaucracy at the best possible price. Someone in the Congress thought that because the fed was a big buyer, it ought to get a good price.
Wal-Mart in Washington, Harry style.
And it worked pretty well. Until 1994, when Newt Gingrich’s Contract With America decided that the GSA’s contracting with vendors could be (and should be) a profit-center. Those were the heady days of privatizing government and making it smaller.
The Federal Supply Service (FSS) Multiple Award Schedule (MAS) Industrial Funding Fee (IFF) Program was developed by working closely with industry and customer agencies. A mouthful. It was profitable, at one percent of contract amounts over a total of $66 billion in annual procurements.
Things get fuzzy though in the privatizing business, when Bush appoints someone like GSA Administrator, Lurita Alexis Doan. Lurita is a political supporter with no prior experience that would even remotely qualify her to supervise 13,000 employees who look after $500 billion in government property.
What she does have is a BA in English, a Masters in Renaissance Literature, fund-raising expertise for Bush and enough moxie and political connections to build a 40 person firm that oversaw border protection with Canada and Mexico.
It seems she also has little patience with criticism.
(Washington Post) In February 2005, an auditor at the General Services Administration presented evidence to agency leaders that one of the government's top technology contractors was overcharging taxpayers.
GSA auditor James M. Corcoran reported that Sun Microsystems had billed the government millions more for computer software and technical support than it charged its commercial customers.
Not a few bucks more. The GSA, which was created by Harry Truman to take advantage of government’s enormous buying power—to save money—was paying millions more. On this and who knows how many other contracts?
If true, the allegation was grounds to terminate the contract and launch a fraud investigation. Instead, senior GSA officials pressed last summer to renew the contract.
That decision meant the government's leading contracting agency would be able to continue collecting millions of dollars in what are called industrial funding fees from Sun under rules that permit the GSA to take a percentage of every sale made to the government. It also meant that taxpayers would pay millions more than necessary, according to congressional investigators.
Whoa. Is the GSA a government agency or a privatization experiment at taxpayer expense?
"We thought of ourselves as being, not a part of the government, but as being a business, and we looked to profit on our customers," said GSA contracting officer Herman S. Caldwell Jr., who warned his superiors against renewing the Sun contract. "When a government buying office becomes a profit center, then bad things are likely to happen."
Things like fraud. Things that sent former GSA Chief of Staff David H. Safavian to jail for eighteen months on a guilty verdict that might have gotten him 20 years.
In testimony before Congress in March, GSA Administrator Lurita Alexis Doan said the agency made a good decision on behalf of taxpayers by renewing the contract. She also said a top aide had looked into the auditor's allegation and told her "nothing was there."