Wednesday, May 23, 2007

Sun Microsystems and the GSA

Changes Spurred Buying, Abuses

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.

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.

This is every federal contractor’s nightmare, a high profile congressional investigation complete with a front-page story in the Washington Post. This is also one of the differences between the private sector and government contracting. If a business thinks you are ripping them off they will simply change suppliers. The last thing they want is a series of articles about how they permitted themselves to be ripped off. Governments are led by politicians who make their careers by exposing fraud, real and imagined. Every detail of your contract could be subject to public scrutiny.

For the civil servants caught up in this, it is a fearsome thing. It is very difficult to defend yourself against an angry committee chairman. The best thing I can suggest is to contact your public affairs officer and get the facts before the public. That is what the news room section of your website is for. Work with the government contracting press, who don’t have to be brought up to speed on the finer points of GSA rules and procedures.

Sun needs to get its story out. There is nothing on their website. I would recommend a straight forward explanation of their side of the negotiations along with a timeline. It would also be useful to document any differences between what they offer their commercial customers, and what they do for their federal customers, in a way that would allow the general public to understand why the federal government is paying a higher price.

There is one point on which I would like clarification:

As it negotiated with the GSA, Sun hired the Washington Management Group, a consulting firm that employs former senior GSA officials, the Waxman memo said. The firm operates the Coalition for Government Procurement, an association of GSA contractors that includes Sun.

I have never heard of trade association that was operated as a division of a private company. I would like to know more about this.

It would be useful if we had a time line beginning with the laws that changed the rules of government contracting. What are those laws and when did they go into effect? Are they just laws or are executive orders also involved? When did the cut backs in personnel overseeing the contracts occur? What areas were affected? We need some charts to show the rise of both the number of contracts and the dollars expended.

Rise in expenditure is not, in and of itself, an indicator of wrong doing. During the period in question every single government agency launched its website. They also completely changed the way they manage documents. These were success stories and should not be treated as suspect.

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