Sen. Grassley presses GSA's Williams on Sun deal

Hearing Investigates Allegations of Misconduct at GSA

The Senate is applying heat to the already smoldering fire under the General Services Administration.

Sen. Charles Grassley (R-Iowa), ranking member of the Senate Finance Committee, asked GSA’s Federal Acquisition Service Commissioner Jim Williams how much he knew about the agency’s decision to renew Sun Microsystems' multiple-award schedule contract despite concerns from the inspector general about possible fraud.

Grassley asked Williams three multipart questions regarding his discussions of the alleged fraud, what actions he has taken or recommended, and what GSA Administrator Lurita Doan knew about it and if she provided guidance.

GSA responded to Grassley’s questions by his March 30 deadline, and Williams and his staff will meet with the senator in the next week or so, Grassley’s spokeswoman said.

“We are reviewing their responses,” the spokeswoman said. “We can’t tell how in-depth the answers are yet.”

The spokeswoman added that although she does not know if another hearing will be held — that is up to the chairman of the Senate Homeland Security and Government Affairs Committee — Grassley will stay on top of the matter through letters and meetings.

GSA did not respond to a request for comments about Grassley’s letter and its response.

“Both you and Administrator Doan knew about the alleged fraud and the Justice Department’s involvement in this matter before the new contract was signed,” Grassley wrote to Williams. “At this very critical juncture, alleged fraud on existing Sun contracts should have been a showstopper.”

A Sun spokeswoman said the company is proud of its current contract with GSA.

“Any suggestion that anyone at GSA gave Sun special treatment during the negotiation process simply does not fit the facts,” she said. “Government contracts are routinely audited. Sun's policy is to fully cooperate with such audits, and we will continue to do so in the future.”

The Sun contract also was a major subject of the House Oversight and Government Reform hearing last week, which featured Doan, Grassley and GSA’s IG Brian Miller.

Despite the IG’s concerns over whether Sun had overcharged the government by more than $25 million and that the new contract could cost agencies tens of millions of dollars, Doan pushed for the contracting officer to renew the contract.

GSA’s IG has since recommended that the Justice Department look into the allegations of fraud, including defective pricing practices.

At the hearing, Grassley said Doan was aware of the fraud nine days before GSA renewed the contract.

“The message this sends to government contractors is very clear: It doesn’t matter how poorly you manage the government’s money or how badly you violate government contracts, the doors to the U.S. Treasury are wide open,” he said in written testimony. “Help yourself to what’s in the coffers. GSA will do business with you on your terms.”

Doan testified that she said she had no involvement in the negotiations for the renewal with Sun, but it came out during questioning that she did have a brief meeting with Williams.

“Any assertion that this agreement between Sun and GSA has resulted in additional costs to taxpayers is wrong,” Doan said in written testimony. “Moreover, it is insulting to the capable people who worked hard to achieve [a] mutually beneficial agreement.”

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