Federal contractors must be prepared for the change in political and business climate in Congress. The success of the Democratic Party in the 2006 elections in part was based on a coherent theme of ethical misconduct by the Republican Party and mismanagement of contracts by the executive branch. Perhaps secondary only to the war, this theme resonated enough to give Democrats control of the 110th Congress.
Legislative and oversight investigative planning by committee chairmen is underway. Congressional impact on the contracting community could be more significant than it has been in a decade. Companies can minimize risks by assessing political dangers and self-assessing ethics and compliance programs.
Year-end 2006 activities provide a road map of those issues most likely to dominate congressional oversight. For example, the then-minority staff of the House Government Reform Committee prepared a report for Representatives Waxman, Cardoza, Obey, Holmes Norton, and Tierney entitled "Waste, Fraud and Abuse in Hurricane Katrina Contracts." Several congressional committees will now hold oversight hearings on Katrina contracting.
A similar report on Iraq contracting is not far behind. Before the election, the House Government Reform Committee was investigating contracting in Iraq. In addition to those issues highlighted in reports on disaster relief in the wake of Hurricane Katrina, the Government Accountability Office has identified "acquisition and contracting issues" as a top area of oversight for the 110th Congress. It also has detailed experts to assist congressional investigations into particular contracts.
The depth and breadth of oversight hearings and investigations is illustrated by the Democratic leaders' announced intentions. Rep. Henry Waxman will chair the Government Reform Committee and has announced the intent to conduct several investigations on contracting. Rep. Ike Skelton, chairman of the House Armed Services Committee, has announced the creation of an oversight subcommittee. In a recent press release Skelton wrote, "Our agenda for the 110th Congress will restore the House Armed Services Committee's historic commitment to robust oversight of the Pentagon and of the Administration's military policies." On the Energy and Commerce Committee, Chairman John Dingell has promised investigations into contracting in Iraq.
Other House Committees are expected to engage in oversight hearings as well. The chair for the Small Business Committee, Nydia Velazquez, recently wrote: "The federal government has not met their small business contracting goal in over six years, and last year alone large corporations received $12 billion in small business contracting awards. It is clear we need to restore accountability into the current system, and open up the federal marketplace to small firms to ensure the federal government is receiving the best savings for the taxpayer dollar." Homeland Security, Appropriations, and the Permanent Select Committee on Intelligence are also likely to have oversight hearings that could impact contractors.
The Senate is expected to join the House with the same vigor and scope as it conducts similar monitoring, oversight and investigations of contractor performance. …