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News Briefs: Jan. 7, 2013

Jan. 6, 2013 - 02:57PM   |  
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Appeal on contractor’s reimbursable costs

The Professional Services Council and National Defense Industrial Association are supporting a company’s legal battle with the government over what contractor costs should be reimbursable.

Contractor KBR is appealing an April 26 U.S. Court of Federal Claims decision that awarded the firm only $11.8 million, including interest, on a $41 million contract claim against the government for dining facilities provided in Iraq between 2003 and 2006.

PSC and NDIA argue that “the standard of whether contractor costs incurred are reasonable is established in the FAR [Federal Acquisition Regulation] and cannot be second-guessed by agencies or courts in hindsight.” The two organizations make the argument in an amicus — friend of the court — brief filed last week with the U.S. Court of Appeals for the Federal Circuit.

“We believe the trial court did not follow the FAR and instead substituted its judgment on how it would have approached the issues, essentially renegotiating the subcontract that KBR forged almost 10 years ago during the most extreme war-time conditions and with the military’s urgent need for the services,” Alan Chvotkin, PSC executive vice president and counsel, said in a statement.

Ex-official charged with conflict of interest

The Federal Emergency Management Agency’s former human resources director last week was charged with violating conflict-of-interest rules.

Timothy Cannon allegedly pursued a lucrative job with a company that was contracting with FEMA. According to a document the Justice Department filed Jan. 2 in the U.S. District Court for the District of Columbia, Cannon got FEMA to hire the unnamed company in 2008 to poll the agency’s employees and provide consulting services. Around the same time, Cannon was allegedly talking to the company’s CEO about hiring him as a partner, with a salary of $175,000.

While the Jan. 2 document does not name the company, a Justice suit filed in the same court in November names Cannon as a co-defendant in a case against the Gallup Organization that cites more than 200 instances where Gallup inflated prices on $13 million in contracts with FEMA, the U.S. Mint and the State Department.

While Cannon was allegedly pursuing a job with the company, Justice said in the Jan. 2 document, he got FEMA to add at least $1.6 million to the original five-year contract, which started out at $6 million, Justice said.

The company allegedly offered to hire Cannon in February 2009, at which point Cannon announced his retirement from FEMA. The company withdrew Cannon’s offer a month later, Justice said.

Cannon could not be reached for comment. A phone listing for him was disconnected.

Treasury employees get reprieve on relocation

The Treasury Department and the General Services Administration will delay for five years a plan to move 450 Treasury Department employees from Hyattsville, Md., to Parkersburg, W.Va., following protests from Maryland lawmakers.

The employees initially had until January 2015 to relocate as part of an effort to consolidate the Treasury Department’s Financial Management Service with the Bureau of Public Debt. The new timeline gives the employees until the end of 2019.

Maryland Sens. Barbara Mikulski and Ben Cardin and Reps. Donna Edwards, Steny Hoyer, Chris Van Hollen, Elijah Cummings and John Sarbanes opposed the relocation.

CBP faulted for efforts to fight corruption

Customs and Border Protection, part of the Department of Homeland Security, needs to do more to prevent employee corruption and misconduct, according to a Government Accountability Office report released last week.

While the agency uses screening tools such as background checks and lie detector tests to evaluate new hires, it does not track and maintain data on which techniques are the most effective for determining whether applicants are suitable to be hired, according to GAO.

CBP also has not assessed the feasibility of expanding its lie detector program to test employees and has failed to craft an “integrity” strategy called for in its current five-year strategic plan, GAO said.

CBP data shows that less than 1 percent of the workforce per fiscal year is arrested for corruption, such as smuggling aliens or drugs; or misconduct, such as domestic violence, the report said.

GAO said CBP concurred with the findings and is working to implement the recommendations.

Army lifts contractor’s suspension

The Army has lifted its suspension of the owner of its top propaganda contractor in Afghanistan, despite the Pentagon’s ongoing criminal investigation against him for late tax payments, treatment of his Afghan employees and an online smear campaign he launched against USA Today.

The Army had suspended Camille Chidiac, co-owner of Leonie Industries, in May after he admitted to setting up disparaging social media sites and other websites against two journalists from USA Today. At the time, Defense Secretary Leon Panetta ordered “appropriate action” taken against Chidiac, according to Pentagon press secretary George Little, who called Chidiac’s actions “intolerable.”

The Army reversed the suspension Nov. 15, allowing Chidiac to bid for new federal contracts, including an extension of the propaganda contract in January. The Army, in a statement from spokesman Matthew Bourke, decided that Chidiac should be reinstated because the Army concluded that he conducted the smear campaign on his own time without Leonie’s resources.

Chidiac put his ownership stake in a trust in an agreement reached with the Army. That prompted the Army to lift its suspension of Chidiac, according to Bourke.

Federal Times is published by Gannett, which also owns USA Today.

Postal IG finds workers’ comp inaccuracies

The U.S. Postal Service’s system for tracking workers’ compensation claims is riddled with unreliable information, the agency’s inspector general found in a new report.

In a small sample of information in individual case files versus what was in the agency’s Employee Health and Safety System, the IG uncovered inaccuracy rates as high as 75 percent on claimants’ duty status and other areas.

The report attributed the mistakes to inadequate training for employees who enter the data; the IG also found that employees and managers didn’t share information on claimants, as required.

The Postal Service, which leads the government in the number of workers comp claims, paid $1.3 billion under the program in fiscal 2011.

Postal Service management agreed with the IG’s recommendations to beef up training and make sure employees follow procedures.

Seven vendors named to $1.4 billion DISA contract

The Defense Information Systems Agency has awarded seven firms spots on a $1.4 billion contract to support the Defense Department’s global telecommunications infrastructure.

Under the Global Information Grid Services Management — Engineering, Transition and Implementation contract, vendors will provide engineering, integration, information technology and other management activities to support the Defense Information System Network, DoD announced last week.

The vendors are: Digital Management Inc., Onyx-Technica Joint Venture, NES Associates LLC, Cambridge International Systems Inc., TurningPoint-EMW Joint Venture LLC, IPKeys Technologies LLC and By Light Professional IT Services Inc. All are based in either Maryland or Virginia.

From Coast Guard to contractor jobs

Twenty-two of 39 high-ranking officials who left the Coast Guard from 2006 through 2010 went to work at some point for Coast Guard contractors, according to a Government Accountability Office review.

In 2011, for example, 14 worked for companies that got agency business, mainly in such areas as scouting out new business opportunities, consulting on specific Coast Guard projects and intelligence analysis.

The review, which covered former admiral-level and Senior Executive Service officials, was required under a 2010 law and did not identify the companies or the individuals.

2013 DoD authorization act signed into law

The Defense Department must cut about 36,000 civilian employees over the next five years under the National Defense Authorization Act, which President Obama signed into law last week.

The law clears the Pentagon to spend $552.2 billion in base budget monies and an additional $88.5 billion on ongoing global wars and other operations. The total amount is $1.7 billion above the Obama administration’s 2013 Pentagon budget request.

Sen. John McCain, R-Ariz., proposed the measure requiring a 5 percent cut in DoD’s civilian workforce. The law also requires a 5 percent cut in the Pentagon’s contractor staff. The bill allows the Defense secretary to phase in the staffing reductions and to exclude critical positions — such as acquisition personnel and inspector general personnel — from the cuts.

The law does not include a Senate proposal that would have capped individual contractor salary reimbursements at $230,700 — the current yearly salary for the vice president. Instead, the Government Accountability Office must study the potential effects of such a compensation cut on the department and contractors.

First cloud firm completes FedRAMP security review

North Carolina-based Autonomic Resources last month became the first and only firm to complete a new security review required for all providers of government cloud products and services.

The Federal Risk and Authorization Management Program, or FedRAMP, was launched in June to standardize security reviews of commercial cloud products.

Autonomic is the first cloud vendor to receive a so-called provisional authority to operate from a joint board of federal chief information officers. The provisional ATO proves a vendor’s cloud services not only meet federal baseline standards, but also are secure enough for use by the Defense and Homeland Security departments and General Services Administration.

By now, the administration had hoped to complete at least three FedRAMP reviews.

Fiscal cliff deal increases transit benefit

The fiscal cliff deal Congress passed last week will nearly double the maximum monthly mass transit benefit received by federal employees, the National Treasury Employees Union said.

The transit benefit will now match the maximum $240 monthly parking subsidy federal employees receive, until the end of 2013. It fell to $125 at the beginning of 2012 after Congress failed to renew the higher maximum benefit.

NTEU said the higher benefit will be retroactive to Jan. 1, 2012.

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