The federal government has awarded about $17 billion in direct contracts under the various provisions of the American Recovery and Reinvestment Act (ARRA). Given the Administration’s commitment to accountability, one hopes that the contractors were chosen with the utmost care and that any companies with serious blemishes on their record were excluded.

If the timing had been a bit different, such a review could have been accomplished much more easily. The General Services Administration is in the process of implementing legislation passed by Congress last year that mandates the creation of a database on the integrity and performance record of federal contractors and grantees. In September GSA published a notice in the Federal Register about its plans for what is being called the Federal Awardee Performance and Integrity Information System, or FAPIIS. The comment period on the plan ended earlier this month. Perhaps the system will be operational before ARRA reaches the end of its two-year life.

Unfortunately, the public will never know the details of how FAPIIS is used to vet contractors for ARRA or any other program. The reason is that Congress caved in to pressure from the contractor community and prohibited public disclosure of the database, which will be available only to federal agencies for internal use.

Fortunately, the public still has access to the Federal Contractor Misconduct Database (FCMD), which was created and is maintained by the non-profit Project On Government Oversight (POGO). It served as the inspiration for FAPIIS, though POGO and other watchdog groups pushed for a public version of the federal database. The FCMD, which covers the 100 largest federal contractors, documents more than 700 cases of misconduct since 1995 that resulted in more than $26 billion in fines and penalties. It covers a wider range of misconduct than will FAPIIS.

Apparently, most federal agencies did not pay close attention to the FCMD in awarding their ARRA contracts. An examination of the national Recovery Act contractor spreadsheet shows that many of those companies appear in POGO’s database as having been involved in cases of misconduct. They account for more than $6 billion in Recovery Act contract awards.

There are 12 contractors with more than one instance of misconduct and ARRA contracts of at least $150 million.* Here they are (listed by volume of ARRA contracts):

• CH2M ($1.8 billion in ARRA contracts; 6 instances of misconduct with penalties of $2.8 million)
• URS ($737 million in contracts; 4 instances and $2.4 million in penalties)
• Northrop Grumman ($596 million in contracts; 29 instances and $821 million in penalties)
• Battelle Memorial Institute ($522 million in contracts; 7 instances and $1.3 million in penalties)
• Honeywell International ($472 million in contracts; 31 instances and $641 million in penalties)
• Fluor ($469 million in contracts; 23 instances and $198 million in penalties)
• SAIC ($312 million in contracts; 10 instances and $14 million in penalties)
• Bechtel ($270 million in contracts; 15 instances and $359 million in penalties)
• University of California ($270 million in contracts; 25 instances and $67 million in penalties)
• Lockheed Martin ($180 million in contracts; 50 instances and $577 million in penalties)
• University of Chicago ($163 million in contracts; 4 instances and $22 million in penalties)
• Jacobs Engineering ($161 million in contracts; 2 instances and $37 million in penalties)

When the nation’s largest contractors have track records such as these, it is not surprising that Congress chose to keep its misconduct database a secret.

* In the case of joint ventures, the amount of the contract award is divided equally among the companies or institutions involved.

Reposted from the Dirt Diggers Digest.

Last spring, when the ink was barely dry on the $787 billion American Recovery and Reinvestment Act (ARRA), there was already concern about an emerging frenzy of lobbying on behalf of corporations seeking a slice of the stimulus pie.

The Obama Administration enacted rules designed to make ARRA lobbying more transparent. That didn’t work out very well, but the Recovery Accountability and Transparency Board recently completed the release of the first round of quarterly disclosure reports by ARRA recipients. In part, these reports serve as a score card showing which companies won the great stimulus lobbying competition.

Beginning with a list of the largest direct federal contracts, I ran the names of the prime contractors through the invaluable lobbying database maintained by the Center for Responsive Politics. Many of the largest contracts went to joint ventures set up by major engineering companies to do clean-up work at nuclear facilities owned by the Department of Energy. In those cases I searched the names of the individual parent companies (and some universities) involved.

There are a total of 52 companies and institutions involved with the 50 largest ARRA contracts. Of these, 34 show up as clients in the Center’s lobbying database. These include large corporations such as Bechtel, Lockheed Martin, Northrop Grumman, General Motors and Ford—as well as smaller players. Also on the list are educational institutions such as the University of California, Stanford University and the University of Chicago.

So far in 2009, the 34 have spent a total of $65 million on lobbying the federal government. Of course, not all that lobbying can be attributed to the quest for stimulus contracts, but it shows in general terms that the ARRA winners include some of the biggest influence-peddlers in Washington.

Moreover, there is every reason to think that a significant portion of their lobbying efforts were focused on stimulus contracts. I searched the database of lobbyist disclosure reports provided by the Senate Office of Public Records. Of those 34 contractors, 24 show up as clients in 2009 lobbying reports in which the word “recovery” or “stimulus” is mentioned in the description of the specific issues on which the lobbyists reported working.

It’s not possible to determine how much of their spending went specifically to ARRA issues. But whatever portion of the $65 million was involved, it was money well spent for the contractors. The 24 that definitely had lobbyists working on ARRA matters ended up with stimulus contracts worth some $7.4 billion. That’s an impressive return on political investment.

Now we can only hope that these and other stimulus contractors crank up their hiring so taxpayers also get something significant out of this bonanza. According to the recent ARRA recipient reports, some of the projects being carried out by those two dozen firms have already created (or retained) a substantial number of jobs. Yet others, in a pattern seen in the overall ARRA contractor data, report few or no jobs despite having already received substantial sums for the projects.

Reposted from the Dirt Diggers Digest.

Here’s a mystery for Recovery Act sleuths: how do you spend more than $1 billion and have no jobs to show for it? That’s one of odd results from an examination of the ARRA recipient data recently released on Recovery.gov.

On October 30 the Recovery Board posted spreadsheets summarizing reports from recipients of federal grants and loans, along with a revised version of the spreadsheet summarizing reports from federal contractors that had originally been released on October 15.

Some critics of the stimulus plan claim that the numbers relating to job creation and retention are exaggerated, yet the October 30 data include numerous instances in which the employment impact of ARRA spending seems to be understated.

The national spreadsheets cover about 130,000 reports from recipients of federal contracts and grants. This number includes grants to state and local governments covered by recipient reporting requirements (Medicaid, for example, is not) but not the reports relating to vendors or loan recipients.

Good Jobs First has found that some 28,000 grant recipients and 3,000 contract recipients placed a zero in the column for number of jobs created or retained. This is not entirely surprising, given that many projects have not yet started. So we then examined the field for project status.

We found that, among the 31,000 zero-job reports, 1,194 describe the project as “More than 50% Completed” and another 1,270 are described as “Completed.” In other words, 2,464 grant and contract projects for which a substantial amount of the work has been done accomplished the amazing feat of not creating or retaining a single job. These projects reported receiving a total of $1.1 billion in payments so far.

There may be good reasons why some of the projects come up with a goose egg in the jobs column, but it is also likely that many of these are cases in which the recipients misunderstood the reporting requirements and incorrectly made it seem as if their project had no employment impact.

Findings such as these should be a wake-up call for the Office of Management and Budget, which is responsible for setting the rules for ARRA reporting. Either the guidelines need to be improved or measures need to be implemented to make sure recipients are not making egregious mistakes in their data submission.

The key goal of ARRA is to create and retain jobs. If the reporting system fails to provide accurate results, we’ll have no idea how effective the entire undertaking may be.

Reposted from the STAR Coalition website.

In a victory for transparency, the ARRA data on Recovery.gov now has names–the names, that is, of the highest paid officers at companies that received Recovery Act contracts directly from the federal government.

As I wrote about a couple of week ago, the federal rules governing ARRA contracts require certain companies to divulge pay information for their five highest-paid people. These are firms that receive $25 million or more in federal governments as long as federal contracts account for 80 percent or more of their total revenue.

When the first versions of the contractor recipient reports were released on October 15, the compensation figures were there but the names were absent. The Recovery Board, which oversees Recovery.gov, was concerned that disclosing the names might be a violation of privacy. Good Jobs First raised this issue in a meeting that we and OMB Watch and the Economic Policy Institute had with Recovery Board Chair Earl Devaney and his top staff. We were told the matter was under consideration.

It appears that transparency won out over privacy. The revised contractor data released last week (along with the new grants and loan data) now includes the names of the executives along with their pay. The spreadsheet also cleans up some glitches that had put the compensation data in incorrect fields.

There are now about two dozen firms reporting total compensation of $1 million or more. The largest is Lockheed Martin Services, which reports that Robert Stevens (CEO of Lockheed Martin) was paid $26.5 million. This is one of numerous examples in which an ARRA contractor affiliated with a publicly traded company reported the compensation of the top executives of its parent company–information that is already disclosed in SEC filings and may not technically be required in the ARRA report.

Yet there are also cases in which privately held companies appear to be disclosing the pay of their top people for the first time. The largest of these amounts comes from consulting firm Booz Allen Hamilton, which reports that its CEO Ralph Shrader was paid $8.4 million.

Since it is not obvious how to find this data, here are some instructions:

• Go to the Download Center on Recovery.gov and under the Recipient Reporting tab, choose the XLS version of the file named All_ContractsFY09Q4.
• Unzip and open the file in Excel.
• Sort the spreadsheet by the field called recipient_officer_totalcomp1 (largest to smallest).
• Scroll across to Column S (recipient name)
• Freeze that column and then scroll across to Column AZ (recipient_officer_1)
• This shows the name of the highest paid officer. The total compensation amount for that person is in Column BE.
• The name of the second highest paid officer is in Column BA and the amount is in Column BF.
• Third highest: BB and BG. Fourth: BC and BH. And fifth: BD and BI.

Reposted from the STAR Coalition website.

At the end of the last week, the Recovery Board released the final results of the first round of ARRA recipient reporting. On October 15 we had already gotten a preview of the data on direct federal contracts. In addition to providing a revision of that data on Friday, Recovery.gov posted spreadsheets summarizing some 116,000 reports from recipients of direct federal grants and loans (the list is so big it’s divided into three files). The amount paid out so far to these grant recipients is about $35 billion.

Not surprisingly, the vast majority of the grant recipients are state and local government agencies-and, to a lesser extent, non-profit organizations. But buried in the lists are also some for-profit corporations. Since it is common to think of for-profits as the recipients of contract awards rather than grants, I thought it would be interesting to look at which companies managed to get themselves on the grants list.

Unfortunately, the Recovery.gov recipient spreadsheets don’t appear to have a field indicating whether a recipient is a for-profit. There is such a field, however, on USASpending.gov, the repository of data on all federal contracts and grants. On the advanced search page for grants, one can set the Recipient Category field to for-profits and the Business Fund Indicator field to ARRA.

And voilà: it shows that for-profits have received an astounding total of 26,738 ARRA grants from the federal government worth a total of $4.4 billion (this is the amount of the grants rather than the amount received). The largest amount is $241.2 million, which went to the for-profit University of Phoenix for Pell grants for students. Many of the other grants to for-profits fall into the same category. Since these are essentially pass-throughs, let’s focus on other types.

The second largest amount is $105.3 million to General Motors (which, thanks to its federal bailout, is almost a government entity). Its grant is part of the $2 billion program to subsidize the development of advanced batteries for electric cars.

Other energy grants on the list derive from the $3.4 billion included in ARRA for “fossil energy,” which is expected to be used mainly for industrial carbon capture projects. On the list of recipients is Hydrogen Energy California LLC (a joint venture of oil giant BP and mining giant Rio Tinto), which got a grant of $50 million for a hydrogen-powered electricity generating plant in California designed to capture most of its carbon emissions. The utility company Arizona Public Service got a $39 million grant for its project designed to test its algae-based carbon mitigation project with a coal-based gasification system.

Unfortunately, there are some significant discrepancies in names and amounts between Recovery.gov and USASpending. For example, on Recovery.gov, the DUNS number from the Hydrogen Energy California listing on USASpending shows up on a listing for which the recipient name is Carson Hydrogen Power LLC and the award amount is $308 million.

At the same time, Recovery.gov provides information on vendors that is not available on USASpending. For example, it shows that Progress Rail Services, a subsidiary of Caterpillar, got a grant of $68.6 million to rebuild a dozen locomotives.

The Recovery.gov data released on Friday also included a list of about 700 direct federal loans. The largest of these went to a for-profit: a $535 million loan from the Department of Energy to Solyndra Inc. to build a thin-film solar photovoltaic manufacturing facility. For some reason, it is missing from the USASpending database.

Some of the discrepancies between Recovery.gov and USASpending.gov are a matter of timing, but it would be a lot easier to reach definitive answers about the business share of ARRA grants and loans–and many other questions–if those discrepancies could be reduced. It would also be helpful if some of the features of USASpending, such as the ability to search by the recipient’s tax status, were made a part of the Recovery.gov data.

Reposted from the STAR Coalition website.