Proposed Air Force Debarments Reveal Critical Flaws in Contracting System

By NEIL GORDON 

Three information technology companies and two company executives are facing debarment from federal contracting for poorly performing, and ultimately abandoning, a multi-million dollar contract to refurbish IT systems at Andrews Air Force Base. But there's more to the case than has been reported.

On October 24, the Air Force issued a Memorandum in Support of Proposed Debarment of Advanced C4 Solutions, Inc., Superior Communications Solutions, Inc. (SCSI), Iron Bow Technologies, SCSI vice president Andrew Bennett, and SCSI majority owner and Iron Bow employee John Wilkerson. All of them are now listed in the Excluded Parties List System (EPLS), the federal government’s database of suspensions, debarments, and proposed debarments. Even better, they are also listed in the Federal Awardee Performance and Integrity Information System (FAPIIS) database, an encouraging sign that the government’s new contractor and grantee accountability database is working as intended.

According to the Air Force memo, in 2010 prime contractor Advanced C4 Solutions and subcontractors SCSI and Iron Bow were hired to build, configure, and maintain “mission critical information technologies to more than 2,200 personnel” on the base. While work was in progress, a review identified numerous flaws in the security, accessibility, and performance of the systems. The companies then ceased work and left the job site. Not only did the companies fail to complete the contract, the memo alleges they are still causing “substantial harm” to the Air Force by refusing to provide the operational manuals or source-code data needed to fix the problems and finish the job.

The memo also states the three companies “participated extensively and directly in developing requirements and cost estimates and conducting market research” on the contract before it was put up for bid. The memo alleges this was a conflict of interest and a violation of contracting rules that should have disqualified the companies from competing for the contract. If true, this would constitute a clear organizational conflict of interest, a growing problem in federal contracting.

You can sense the Air Force’s frustration: “Even though [Advanced C4 Solutions], SCSI and Iron Bow improperly developed their own contract requirements,” the memo states, “subjects failed to meet their own requirements.” Ouch!

There’s also the possibility that John Wilkerson’s dual role as majority owner of SCSI and employee of Iron Bow posed another kind of conflict of interest. According to the memo, Iron Bow, which was a subcontractor to Advanced C4 Solutions, also received multiple orders to provide audio-visual equipment and furnishings and then subcontracted with SCSI to provide material and furnishings. Did this arrangement allow Wilkerson to double-dip or, at the very least, flout regulations designed to cut down on the excessive use of subcontractors?

The three companies might have violated the law by performing an inherently governmental function. An inherently governmental function is a function so intimately related to the public interest that it must be performed by federal government employees, not contractors. The Federal Acquisition Regulation (FAR), the principal set of rules governing federal contracting, expressly prohibits the federal government from contracting out inherently governmental functions. Among the examples of inherently governmental functions listed in FAR Subpart 7.5 is “approving any contractual documents, [including] documents defining requirements,” which seems to have occurred in this case. Additionally, “services in support of acquisition planning” is listed in Subpart 7.5 as an example of functions generally not considered inherently governmental functions but which “may approach” being in that category in certain circumstances. While the FAR allows the government to contract out these functions, there is a heightened danger the contractor will cross the line and perform inherently governmental functions.

POGO is also curious about one of the four bases for the proposed debarments, which is that the conduct of Advanced C4 Solutions, SCSI, and Iron Bow Technologies “evidences a history of failure to perform, or of unsatisfactory performance of, one or more contracts.” It’s not clear what this means: Is this referring to the Andrews AFB project, or do these companies have a history of poor performance on other federal contracts? Unfortunately, the Air Force will not provide more details while the matter is pending. Worse still, contractor past performance information is treated by the government like a state secret, despite POGO’s calls to make such information public.

This case is another reminder of the dangers of the government’s over-reliance on contractors. In addition to possible conflicts of interest and contractor performance of inherently governmental functions, we appear to have critical services at Andrews Air Force Base–the home base of Air Force One–being botched, and then held hostage, by non-responsible, uncooperative contractors.

Neil Gordon is a POGO Investigator.

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