Senator Hillary Clinton Calls for Moratorium on Abusive and Unchecked No-Bid Contracts

Measure Would Curtail Fraud, Waste and Abuse in Government No-Bid Contracts

March 12, 2008 -- Washington, DC — Senator Hillary Rodham Clinton today announced that she will introduce an amendment to the budget resolution now before Congress that would impose greater congressional oversight and accountability on federal contracting for the new fiscal year, effectively placing a one-year moratorium on the current practice of unchecked and wasteful no-bid and limited competition federal contracts.

Under the Bush Administration, it has become common practice for these contracts to be steered toward political allies, costing the taxpayers hundreds of billions of dollars.

“It is outrageous that the Bush Administration has siphoned away literally hundreds of billions of federal dollars through wasteful no-bid contracts with virtually no oversight or accountability. As we work to restore fiscal responsibility and bring greater transparency to the earmark process we must also root out the abuses in federal contracting and these no-bid and limited bid contracts that dwarf earmark spending by 10 to 1,” said Senator Clinton.

Spending on federal contracts has been the fastest growing part of the discretionary budget over the last six years yet has received little attention. Under this Administration the number of no-bid contracts has more than doubled, and between 2000 and 2006 the spending on these contracts increased 121 percent to $103 billion, representing more than half of federal procurement spending. Spending on both no-bid and limited competition contracts together has more than tripled, from $67.5 billion in 2000 to $206.9 billion in 2006, about ten times the amount spent on Congressional earmarks. During that time, companies such as Halliburton have enjoyed record profits due to a 700 percent increase in tax-payer funds awarded to them. A recent Congressional report identified 187 contracts awarded over the last six years valued at $1.1 trillion that have been plagued by waste, fraud, abuse, or mismanagement where federal auditors found massive overcharges, wasteful spending, and poor oversight.

Senator Clinton’s amendment would create a new “Point of Order” against any spending bill in Fiscal Year 2009 that does not explicitly require a federal agency’s compliance with competitive bid contracting rules, which have been largely ignored or waived with little oversight under the Bush Administration. To ensure compliance and discourage cronyism, the head of each agency would be required to certify to Congress under a sworn affidavit that their contracting decisions comply with open and competitive contracting rules.

While Senator Clinton’s amendment maintains exceptions for situations such as a national emergency, national security and national defense, the head of each agency would be required to notify Congress immediately when they intended to invoke these exceptions and to provide detailed reporting on their justifications so that this process is open and transparent to the public. The Clinton amendment would mandate annual and independent audits from each agency’s Inspector General.

Finally, the Clinton amendment would require full and accurate accounting on all current no-bid and limited bid contracts which many agencies keep hidden. To illustrate this point, the head of the GAO testified last year that the “Department of Homeland Security has not been receptive towards oversight and its delays in providing Congress and us with access to various documents and officials have impeded our work.”

Source: Senator Hillary Clinton

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