Doan's contract misstep will bring more scrutiny, experts say

The General Services Administration and the procurement community have been hit with another scandal: Lurita Doan, GSA’s administrator, is under investigation by the agency’s inspector general for violating contracting regulations, according to the Washington Post.

The Post reported today that Doan tried to give a no-bid contract to a company founded and run by a longtime friend. Doan personally signed a contract with her friend’s public relations firm for $20,000 to produce a 24-page report promoting GSA’s use of minority- and woman-owned businesses, according to the front-page story.

The story states that GSA terminated the contract last summer after GSA lawyers and other agency officials identified possible regulation compliance problems, calling the contract a mistake.

Procurement experts see this as a gaffe by a bullish administrator generally new to government procurement. Still, they say, this is a good lesson for Doan.

“You don’t sign handwritten contracts to your friends,” said Angela Styles, former administrator of the Office of Federal Procurement Policy, who now is a partner at the law firm of Miller and Chevalier. “It’s handwritten.”

GSA has suffered in the past for procurement missteps. As the agency became more relaxed regarding federal regulations, scrutiny from Congress and the IG increased.

In the 1990s, government procurement officials pushed agencies to function like the private sector. If regulations did not expressly prohibit an action, it was acceptable, Styles said of the defunct philosophy. It backfired on officials, leading to more inquiry and oversight.

Now, with Capitol Hill interested in investigating contracting issues, Doan and GSA may find themselves under a brighter spotlight. Styles and other experts expect Congress to call Doan to testify about contracting and procurement problems.

Rep. Edolphus Towns (D-N.Y.), the newly appointed chairman of the House Oversight and Government Reform Committee’s Government Management, Organization and Procurement Subcommittee, would not comment on the issue at the time, a spokeswoman said.

Rep. Henry Waxman (D-Calif.), chairman of the committee, is interested in investigating procurement issues. A member of the House Democratic Waste, Fraud and Abuse Truth Squad, he introduced legislation in the previous Congress to make federal contracting practices more accountable and transparent. His bill also promoted more competition in contracting. He has not reintroduced it so far in the current session of Congress.

“This was an innocent undertaking by Mrs. Doan,” said Larry Allen, executive vice president of the Coalition for Government Procurement. “I don’t think at all that there was anything underhanded about this.”

Doan recognized an issue needing immediate attention, and as a former businesswoman, she turned to a trusted resource she had worked with in the past. “That’s a typical private-sector approach,” he said.

“She was probably also surprised to learn that the GSA administrator can’t award contracts on her own prerogative,” he added.

Allen called Doan’s mistake a good lesson.

Jonathan Aronie, a partner in the Government Contracts Practice Group and a Federal Computer Week columnist, said officials, while trying to follow the complex and often counterintuitive procurement rules, “find themselves in messes they never intended to be in” because of mistakes like Doan’s.

Aronie said he also expects Doan to testify before Congress. Lawmakers will focus on sole-source or no-bid contracts, like the one she wrote with the PR firm, he added. In the past, IGs from GSA and the Defense Department have investigated sole-source contracting issues, and critics will use her mistake as another example of the need for change.

Whether fairly or not, Aronie said GSA will get more attention than many other agencies from investigators and congressional oversight committees.

Doan’s predicament may lead Congress to question how well the procurement system works, experts said.

But “who can say the procurement system works if political appointees sign contracts to their friends?” Styles asked.

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