The United States government procurement system should exemplify transparency, integrity, and competition. Since its inception, it has stood for equity amongst all contractors and a mutually benefiting relationship between the federal government and the contractor with one end goal in mind, providing the best value to the American people for their tax dollars. Recent administrations have demonstrated on more than one occasion how it is possible to improperly influence the award of a government contract, making our exceptional system appear weak, fragile, and amenable to corruption. This Note highlights the balance of power in the government procurement system and the holes that recent administrations have utilized for their own personal agendas. To fill these gaps, the Federal Acquisition Regulation (FAR) must be amended to clarify the role of the contracting officer. Congress should enact legislation excluding political influence on the contract award decision, and civil service laws must be strengthened to provide contracting officers with the necessary independence and security that their roles require.
The United States has a history of corruption in government, specifically through the spoils system. The spoils system festered, and public office was used to appoint loyal supporters and award government contracts to allies. This system is not new to the federal government and largely developed between 1860–1890. It has been most recently on display in the Trump and Obama administrations. For example President Trump succeeded in awarding multiple government contracts for hundreds of million dollars to Fisher Sand & Gravel Company, a company headed by one of his loyal campaign donors, Tommy Fisher. Yet, the Competition and Contracting Act (CICA) requires “full and open” competition during the bidding and award process. Awarding a contract to a political ally, such as Mr. Fisher, based on loyalty rather than merit, is illustrative of the spoils system and wholly inconsistent with “full and open” competition.
Three pillars of the U.S. acquisition system are transparency, integrity, and competition. As a result, the U.S. federal government buys the highest quality goods and services at the most desirable prices to the American taxpayer. In 2020, the federal government spent over $670 billion in federal government contracts, more than any other time in U.S. history. With an unprecedented expenditure of funds, it is imperative to uphold and consistently strengthen those three pillars of the system to combat against waste, fraud, and inequity.
This Note focuses on the contract award process and the requirement for the Contracting Officer (CO) to utilize their independent business judgment to select an awardee. The CO’s judgment, combined with the technical expertise of evaluation boards and a source selection authority (SSA) during the source selection process, results in an objective, impartial awarding of a contract and thus a wise expenditure of taxpayer dollars. The three pillars of our system begin to deteriorate when those outside this decision-making process begin to improperly influence those charged with choosing an awardee. The effect is a contract award decision detrimental to both the American public and the ongoing duty of the Executive Branch to ensure that the laws are faithfully executed and administered.
The Trump administration improperly influenced the decision-making process of our COs on more than one occasion, including in the construction of the Southern border wall and the attempted acquisition of department-wide cloud services for the Pentagon. However, this is not an issue solely attributable to the Trump administration. President Obama awarded large loan guarantees through a Department of Energy (DOE) program to political allies and campaign donors. Recent administrations and their prodding have resulted in an appearance of corruption that may have negative effects on the American public and administration of the federal government.
The United States is, or should be, far removed from its infamous history under the spoils system that dominated American politics throughout the nineteenth century. However, recent administrations have illustrated how a modern-day President can affect the integrity and transparency of a system built on merit, rather than loyalty. The spoils system has been used somewhat clandestinely throughout the past decade in the expenditure of government funds. If the gaps in our procurement system are not fixed soon, this patronage-based system could cement itself and exacerbate the level of corruption in the federal government.
This problem requires a three-pronged approach by the FAR Council and Congress to limit political interference––especially from the White House––in contract award decisions. This Note argues that those individuals making source selection decisions need to be further insulated from outside political influence. First, the FAR Council should include specific language in the FAR making it unequivocally clear that COs should treat contractors fairly and impartially and that they should be completely independent from presidential prodding. Next, Congress should explicitly prohibit any political influence by political appointees over the government contract award process. Lastly, civil service laws should be strengthened to give COs more job security, a change that would encourage more independence.
COs may feel insecure about their job security if they select an awardee inconsistent with the President’s wishes. Continued faith in the rules and regulations that govern government contracts and those that make the award decision will naturally encourage firms to enter into government contracts, further increasing competition. Increased competition leads to the intended purpose of the U.S. acquisition system, providing the federal government with the highest quality goods and services at the most reasonable rates.
In Section II, this Note outlines important separation of powers principles, such as the Executive Branch’s interpretation of its constitutionally delegated powers and removal protections for Executive Branch employees. These principles affect the proposed solution of insulating the COs because, while they need independence in contract awards, they are still required to be faithful to the President’s policies. Section III analyzes two examples from the Trump administration and one example from the Obama administration where COs were either improperly influenced or government funds were awarded on the basis of political loyalty, resulting in the appearance of a weak, inequitable administration of government. Finally, Section IV expands on the three proposed solutions that will ensure future administrations are unable to improperly influence the contract award decision.
The process of awarding government contracts should be divested from politics. It is the policy of the party in office to determine where funds are obligated to, whether it be for the construction of a wall at the Southern border or loans for a clean energy initiative. The issue at hand is not a judgment call on those policies, but an examination of the processes used to award such funds to private firms. The balance of power between those deciding which programs are to be funded and the impartiality afforded to the COs using those funds to award contracts on the basis of merit is a focal point of the U.S. procurement system.
Those who work in the Executive Branch should be cognizant of the interests of the public while also faithfully executing and carrying out the law in the manner the President sees fit. The President and Vice-President are the only Executive Branch officials whom all eligible voters can vote on. Thus, the President represents the will of the American people ensuring that the laws are faithfully executed. Within the Executive Branch, various agencies are established with organic statutes describing their power to promulgate and adjudicate rules. This authority contains a great deal of discretion that can be appropriately influenced by the President.
The Framers envisioned that the President would act in “his own opinion with vigor and decision.” He was given the power to veto legislation passed by Congress to protect against impulsive laws created by factions in Congress that would be “unfriendly to the public good.” On one hand, he is a representative of the people, and, on the other hand, he has the power to act in his own opinion where he sees fit. As a result, it is possible that the powers and duties of the President might be in conflict. The Framers felt comfortable giving large swaths of power to one individual because if the President ever abused his constitutionally vested authority, he would be subject to investigations and trials by Congress.
The President oversees the Executive Branch and ensures faithful execution of the laws. This duty creates a necessary tension within the world of government procurement that can be analogized to a coin. On one side of the coin is the President’s duty to oversee and be responsible for his subordinates to ensure the “stability of the system of administration.” The President must preserve the wise disbursement and use of appropriated funds to ensure the faithful execution of laws. Additionally, the political party in office administering the system incorporates their specific policies through the programs that they choose to fund.
The flip side of the coin is the integrity and transparency of the federal procurement system. Acquisition teams tasked with procuring goods and services for the federal government must abide by the rules set out in the FAR and CICA that identify the preference for fair and open competition, aided by the sound business judgment of the CO. The Executive Branch will then “accept and manage the risk” associated with granting this independence to procurement officials. However, the President circumvents the government contracts rules when he interferes with the contract award decision to ensure that the contract is awarded to one of his supporters.
Article II of the U.S. Constitution defines the presidential powers. Article II, Section 3 of the U.S. Constitution states, “The executive power shall be vested in a President of the United States of America . . .” and that the President “shall take care that the laws be faithfully executed . . . .” James Madison reasoned that “if any power whatsoever is in its nature Executive, it is the power of appointing, overseeing, and controlling those who execute the laws.”
The Supreme Court grappled with the distribution of Executive Branch powers in Myers v. United States, which held that the removal power of any officer of the Executive Branch shall be under the exclusive control of the President. Defects in ability, intelligence, or loyalty in subordinate officers’ administration of laws are all bases for the President to remove subordinate officers.
The removal power allows the President to ensure that laws and policies are carried out appropriately and faithfully, but it may also allow the President to repeatedly fire employees who are not carrying out the law as the President wishes. Firing rogue employees for performing poorly can benefit the efficient administration of government as they would presumably be replaced with more capable individuals. However, firing a rogue employee––such as a CO who does not carry out their superior’s wishes––can also be detrimental if said employee is trying to award a federal contract based on merit and in compliance with applicable procurement laws and regulations. In that case, they may be fired or might fear being terminated if they do not follow the President’s order to award the contract to a firm that helped the President win an election, despite the offeror being poorly qualified.
In Humphrey’s Executor v. United States, the Supreme Court limited this removal power for officers within quasi-legislative bodies created by Congress. In Humphrey’s Executor, the President could not remove members of the independent Federal Trade Commission (FTC), except for good cause. Congress’s intent in establishing the FTC was to create a body of experts “independent of executive authority . . . and free to exercise its judgment without the leave or hindrance of any other official or any department of the government.” The Court showed deference to congressional intent for a body independent of the executive, with functions that help carry out the law of the land.
The Supreme Court has also addressed the question of removal of inferior officers by the President in Morrison v. Olson. Morrison asked whether removal restrictions impede the President’s ability to perform his constitutional duty to faithfully execute the laws and thus violate separation of powers principles. The Court held that independent counsel could be given good-cause tenure protections because of the nature of their job and the lack of policymaking and administrative authority granted.
In contrast, the Court held in Free Enterprise Fund v. Public Company Oversight Accounting Board that multi-level protection of inferior officers exercising vast decision-making ability unconstitutionally strips the President of his removal power. The Court held that this method of double insulation for inferior officers, guarding them from presidential removal as well as protecting against superior officer removal, was unconstitutional. In part, the President needs to be held accountable for the decisions made by those under him; however, the Framers’ system of electoral accountability—the President “control[ling], oversee[ing], and supervis[ing]” those subordinate, Executive Branch officials making decisions on behalf of him––becomes muddled if he is unable to remove these individuals. Thus, there is a concern that insulating COs too much will grant them more job security than necessary, making it difficult to remove poor performers.
The COs’ independence creates tension with the theories of presidential executive power that have been adopted by recent administrations. The Trump administration was a strong proponent of a powerful Executive Branch through its civil service protection stripping. Claims of strong, centralized presidential power are not new by any means. Alexander Hamilton argued that the executive powers in Article II of the Constitution should be read expansively, limited only by those ancillary conditions throughout the Constitution. Theodore Roosevelt took this interpretation and coined the “stewardship theory,” whereby the President is free to do anything except for that which is explicitly prohibited by the Constitution and laws. A complimentary notion is “departmentalism,” where the executive interprets its powers in whatever way necessary to fulfill its own responsibilities, while not being constrained by the judiciary and legislative interpretations of the executive’s power.
Another relevant theory of presidential power is known as the completion theory. This theory espouses that the President has the authority “to prescribe incidental details needed to carry into execution a legislative scheme, even in the absence of any congressional authorization to complete that scheme.” Professors Jack Goldsmith and John F. Manning use the Supreme Court’s seminal decision in Youngstown Sheet & Tube Co. to exemplify this power. President Truman’s Executive Order in Youngstown, which directed the Secretary of Commerce to seize and operate most of the nation’s steel mills, did “not direct that a congressional policy be executed in a manner prescribed by Congress––it direct[ed] that a presidential policy be executed in a manner prescribed by the President.” Despite no specific statutory authorization of presidential power, the President may complete a broad legislative scheme by deciding issues explicitly delegated to others.
While the President has significant authority over executive actions, his power to control subordinates is not without limits. If the President substituted his or her own judgments for congressionally delegated decision-making, “it would render it impossible for Congress . . . to leave anything to the specially trained judgment of a subordinate executive official with any assurance that [their] discretion would not be perverted to political ends for the advantage of the administrative in power.”
Throughout the first two and a half centuries of the United States, the President has become the overseer rather than the decider in the ordinary administration of laws. The President is an overseer through his removal powers “to ensure the faithful execution of the laws.” Nonetheless, when a President decides to shift from overseeing to directly influencing the outcome of government contract awards, he or she bypasses the equitable principles at the foundation of the U.S. acquisition system.
The CO’s role in the contract award process is at the intersection of fulfilling the government’s desire to receive the best value while also providing a competitive and inclusive environment for potential contractors. The FAR mandates that COs independently use their sound business judgment. COs must receive from the head of an agency clear limits on their delegated authority to bind the government into contracts. Each agency head shall establish a system for selection, appointment, and termination of COs consistent with the Office of Federal Procurement Policy’s guidelines. Members of the acquisition team are given a great deal of discretion in exercising their sound business judgment. If a specific strategy or decision is in the best interests of the government, then absent any federal law, executive order, or regulation to the contrary, the decision is a permissible exercise of authority. The FAR acknowledges this independence repeatedly, encouraging the use of broad discretion and innovation in decision-making throughout the entire acquisition.
This independence is echoed and embraced by the courts. The Court of Federal Claims has held that the CO should “put his own mind to the problems and render his own decisions.” The CO must take responsibility for all determinations included in their final opinion. The CO’s decisions and determinations must be objective and independent, avoiding even the appearance of coercion by some other official. Furthermore, a CO’s failure to exercise independent judgment has repeatedly been found to constitute bad faith, potentially creating liability for the government. Moreover, it is an “abdication rather than an exercise of his judgment” if a CO is improperly influenced by a party to terminate a contract rather than utilize their independent judgment. Similar to congressional intent in establishing the FTC in Humphrey’s Executor, the FAR demonstrates that COs need to conduct business at an independent level to ensure the integrity of the procurement process.
These procedures and processes aid in the integrity and equity of the federal acquisition system. Prospective offerors will lack the confidence to compete in federal procurements when contracts seem to be awarded on the basis of relationships with the prospective awardees, rather than on the quality of their goods or services. The FAR does not explicitly address improper political influence and coercion from officials above the CO. This Note contends that the FAR’s mandate for independent judgment from a CO should be what occurs in practice. However, as Section III will demonstrate, recent administrations have made that “independent judgment” more dependent on the President’s personal ties with prospective awardees. COs are put in difficult positions when they are coerced into making decisions that deviate from the principles laid out in the FAR.
The President has the ability to oversee his subordinates while simultaneously allowing them enough discretion to perform their duties as Congress intended. These two forces at play act as two sides of the same coin. The first side is the President’s executive power. The President has attempted to tip the scale in his favor by using a theory of executive power, the Unitary Executive Theory, to justify it.
The Unitary Executive Theory became popular in the Reagan administration, which more aggressively controlled and removed subordinate officials. The George W. Bush administration then extended this theory to both foreign and domestic national security matters. Similarly, the Obama administration and Trump administrations did nothing to stop further aggrandizement of power. This power grab has been “institutionalized and normalized” by recent administrations and is likely to completely engulf the CO’s independent discretion needed for the continual success of our procurement system.
The flip side of the coin is the CO’s independence. Congress should ensure that the federal procurement system is fair and equitable to all contractors. This goal requires independent, sound business judgment from COs tasked with awarding contracts. This Note recognizes the possibility of another “Saturday Night Massacre” and aims to prevent such a situation in which a political appointee could continuously fire COs until one comes along that would award the contracts to specific contractors, regardless of merit. Additionally, Congress should not create a double-insulating mechanism (as in Free Enterprise Fund) but should instead strengthen the civil service protection laws that might otherwise be weakened by future administrations.
The cronyism plaguing recent administrations is not the fault of one individual. It is a systemic issue that has cemented itself in the world of government procurement. Improperly influencing contract awards and inappropriately using public funds are both tools in the political machine and their use is not limited to one political party.
Faith in our institutions is important. A leading theory of governance posits that institutions begin to underperform when they are captured by a small, narrow set of interests that seek to serve their own agenda rather than the overall public good. U.S. public procurement is not functioning how many commentators argue that it should. Presidents have pushed their narrow agendas of awarding contracts to those parties that they favor and denying contract awards to those parties whom they dislike.
Specifically, this section identifies two examples from the Trump administration, one being the appearance of improper coercion and the other being clear, improper influence on a government contract. Additionally, one example from the Obama administration will be analyzed to highlight how any future president, regardless of political party or capability, will be able to improperly influence the expenditure of public funds.
The Joint Enterprise Defense Infrastructure (JEDI) was a single Indefinite Delivery Indefinite Quantity (IDIQ) contract aimed at modernizing cloud computing platforms for the entire Department of Defense (DoD). The $10 billion contract was awarded to Microsoft over Amazon Web Services (AWS) and other prospective offerors in October of 2019. Protests ensued immediately from AWS alleging errors in the procurement process. The Pentagon completed its review and found the award to Microsoft was still the best overall value to the government. After revised proposals and AWS’s emergence as the lowest bidder, the contract was still awarded to Microsoft. AWS then challenged the continued award to Microsoft. AWS sought relief on four counts including “a failure to evaluate proposals by the terms of the solicitation; disparate treatment that favored Microsoft’s bid over that of AWS; an ‘irrational’ best value decision; and claims of ‘bias, bad faith, improper influence, and/or conflict of interest.’” On April 28, 2021, the U.S. Court of Federal Claims issued a sealed decision denying the Department of Justice’s (DOJ) and Microsoft’s motions to dismiss. On July 6, 2021, the DoD cancelled JEDI and created a multi-vendor IDIQ entitled Joint Warfighter Cloud Capability (JWCC) procurement, which appeared to be restricted to Microsoft and AWS. Attorneys in the practice area found the “unusual circumstances that led to the protracted protests over JEDI . . . [had] turned that deal into a political issue.”
Many critics, including AWS, claim the procurement was tainted with political pressure from then President Trump who had longstanding animosity towards Jeff Bezos, the owner of AWS. The disdain for Mr. Bezos was illustrated through a series of tweets by President Trump dating back to as early as 2015. On the face of the JEDI procurement, there appears to have been political influence exerted on the DoD’s decision to award to Microsoft and not AWS. And there is something inherently wrong with people outside of the acquisition, such as the President, affecting what is supposed to be an independent, impartial source selection.
In this procurement, a highly complex source selection team was assembled, many different evaluation criteria were evaluated against Microsoft and AWS, the SSA was tasked with selecting that offer which best conformed to the criteria and represented the best value to the government, and there was still the appearance of improper influence by President Trump. Presidential prodding into a non-political decision might look like a form of corruption to the general public. Some may even consider it a reintroduction of the spoils system used by administrations throughout the nineteenth century. The appearance of corruption can make the public lose faith and legitimacy in our democratic institutions and thus cause a loss of trust in our government altogether.
The DoD Inspector General (IG) found no errors or discrepancies when reviewing the source selection authority’s decision to choose Microsoft over AWS. The report claimed that the SSA documented her decision based on her independent judgment, consistent with all evaluation criteria, and technical evaluations from her source selection team further supported her decision. Subsequently, the IG found no improprieties existed throughout the source selection process.
It is difficult to square the IG office’s findings with the allegations stemming from Guy Snodgrass’s book, Holding The Line: Inside Trump’s Pentagon with Secretary Mattis. Mr. Snodgrass was the communications director to the former Secretary of Defense, General James N. Mattis. His book details some of the ethical dilemmas that Mattis faced while serving under President Trump. Snodgrass claims President Trump told Secretary Mattis to “screw Amazon” out of the JEDI contract. These allegations should be taken lightly since a staffer under Secretary Mattis told the media, shortly after release of the book, that Snodgrass was a junior level staffer with no real decision-making power. However, it is immaterial whether Snodgrass was in a powerful position or not. It is significant that he claims to have heard those words come from President Trump directed at Secretary Mattis, making a case for taint during the source selection process.
The IG report on the JEDI procurement found that the DoD was in compliance with all FAR and DoD procedures. The IG report also stated it was unable to determine the appropriateness of DoD’s decision to award JEDI to Microsoft over AWS. Microsoft’s attorneys believed the improper political bias claim by AWS should have been raised as a pre-award protest; because the award was already granted, Microsoft argued that AWS waived its right to bring that claim. AWS claimed that the DoD erred in awarding the contract to Microsoft after proposal revisions occurred and AWS emerged as the lowest priced offeror. Finally, AWS claimed that meetings had occurred between JEDI procurement officials and senior White House officials to discuss the details of the procurement and that the IG’s report was obstructed by these meetings.
These arguments at the Court of Federal Claims, and the resulting media scrutiny, highlight how even the appearance of corruption can erode the public’s trust in our public procurement system. Whether actual improper influence occurred may never be known. Studies have shown that humans innately prefer awards based on merits rather than nepotism, favoritism, and cronyism. As such, the impact of these stories, the cancellation of JEDI, and the subsequent recompete of JWCC to both AWS and Microsoft will have a deleterious effect on the layperson looking in from the outside.
The expenditure of taxpayer money needs to be independent and nonpolitical, and it must provide the best value to the government. The U.S. federal procurement system seems weak, frail, and inequitable when the political and personal animosities of the President trickle down to COs. Ethical standards aimed at preventing undue political influence on COs during contract award decisions can be promulgated through specific, deterrent legislation that will result in future administrations thinking twice before improperly influencing a source selection.
A more egregious example of improper influencing of contract awards was in the procurement of the Southern border wall. President Trump ran his presidential campaign on the promise to build a physical wall on the Southern border to curb illegal immigration; by the end of his administration, 450 miles of the wall were completed. Fisher Sand and Gravel Company (Fisher), a North Dakota-based construction firm, was rejected on more than one occasion by the Army Corps of Engineers for failure to meet specifications when building prototype walls in 2017. The Army Corps of Engineers eventually began awarding contracts to Fisher to build the border wall, after enough prodding from President Trump.
Representative Bennie Thompson (D-MS) asked the DoD’s IG to determine whether President Trump inappropriately interfered with the decision to award Fisher the December 2019 contract. The DoD IG blamed the DoD General Counsel for being uncooperative in sending over requested documents and communications regarding the contract award. Over a year passed, and the IG was unable to complete its audit, and contract performance with Fisher was never halted. Border wall construction was officially paused on January 20, 2021, by President Joseph R. Biden, ending the work being performed by Fisher.
As noted above in relation to the JEDI procurement, it is destructive to the faith and trust the public and contractors have in the U.S. procurement system when the President attempts to influence a source selection decision. This is especially true when the chosen contractor may not provide the best value to the government. However, awarding the contracts to Fisher based solely on the President’s prodding, harkens back to the spoils system employed during the nineteenth century. Tommy Fisher, the owner of Fisher, has ties to President Trump, the GOP, and Fox News.
Tommy Fisher appeared on Fox News to tout his company’s ability to complete the border wall faster than any other firm on numerous occasions. Simultaneously, Trump bemoaned his administration’s slow, lackluster effort towards completing the wall. Fisher is also extremely close to Senator Kevin Cramer (R-N.D.). Cramer personally lobbied for Fisher to President Trump and received campaign donations from Fisher, and Fisher was Cramer’s guest at President Trump’s State of the Union in 2019. Lastly, many of President Trump’s closest allies have worked alongside Fisher on private border wall expansions through a company called We Build the Wall. Some of the previous board members of We Build the Wall included Steve Bannon, the former White House strategist, Erik Prince, the brother of Education Secretary Betsy DeVos, and Kris Kobach, the former vice chair of Trump’s voter-fraud commission.
Fisher and President Trump’s close ties run counter to the ideal of integrity, a main pillar of the U.S. procurement system. The FAR is intended to provide the government with the best value in goods and services. It provides guidance to SSAs so they can impartially determine which of the prospective offerors will perform at the best value to the government, considering not only efficiently, but also compliance with the specifications. Fisher had failed on previous occasions to conform its prototype models of the border wall to the solicitation and was rejected. The Army Corps of Engineers appeared to succumb to the pressures of the President, which resulted in a deterioration of trust in government contracting. If Fisher was proficient and able to provide the best value to the government, this example would likely not hold as much weight, since it would be evidence of a merits-based decision, rather than the spoils system approach. However, Fisher was unqualified and incompetent, and it failed multiple times to meet the specifications laid out in the solicitation.
If the President is able to micro-manage procurement actions in the same way President Trump did with Fisher, this outcome erodes the ability of the SSA to make an independent business judgment when awarding contracts. Such micro-management replaces an SSA’s expert, impartial judgment on an award decision, with that of the President––someone likely far removed from the technical specifications and unknowledgeable about the capabilities of prospective offerors competing. Even more appalling is that President Trump granted this contract to a compatriot that works alongside many of his closest allies. The federal government chose a firm based on who the CEO was and what he might have said over a popular mainstream media organization’s primetime show, rather than choosing to award through the unbiased process called for by federal law.
Although not as obvious as the Fisher contract, the Obama administration also appeared to have given favorable, government subsidized loans to political donors of President Barrack Obama’s presidential campaign. This example highlights the gaps that allow the White House to improperly influence expenditure of public funds, regardless of political party. This problem, as described in the preceding section, permeates the U.S. government procurement regime.
A Department of Energy (DOE) loan guarantee program (LGP), established in 2005 under the Energy Policy Act, utilized “innovative technology to reduce, avoid, or sequester greenhouse gas emissions.” Congress tasked the Government Accountability Office (GAO) with reviewing the administration and implementation of the LGP. The review found that the DOE methods and procedures utilized were inconsistent, vague, and favored certain firms and disadvantaged others.
LPG procedures outlined a multitude of reviews to be submitted and evaluated by DOE before loan negotiations with firms began. However, in at least five of ten loan commitments, DOE negotiated the terms before receiving all of the reviews. In one case, DOE made a conditional commitment before receiving any of the required documents or reviews. The GAO found it unclear how DOE was able to negotiate the terms of those commitments without first performing their due diligence reviews to mitigate risk. DOE procedures utilized in implementing the LPG program were inconsistent, opaque, and surreptitious.
An ABC News and Center for Public Integrity investigation found that many of the DOE loan commitments were given to those who donated to President Obama’s campaign. A notable example, Steve Westly donated $500,000 to the campaign. Westly began a venture capital firm, the Westly Group, which owned a major share of Tesla. In 2010, he was tapped to be on a special advisory panel for DOE, a position which gave him insider access to then-Secretary Steven Chu which led to a $465 million loan for Tesla under the LGP. The investigation found multiple other examples of such patronage, including venture capitalists and owners of electric utility companies that all received special treatment under the LGP.
This patronage enabled individuals to buy their way into massive, low-interest rate loans, just by donating to President Obama’s election campaign. The LGP issue is somewhat distinguishable from the JEDI and Fisher contracts since it did not involve CO decisions regarding contract awards. However, the LGP is strikingly similar to both contracts since these loans were likely given out based on political patronage, potentially in blatant disregard of those firms who actually may have needed the loans. The award of federal government funds to political supporters and their subsidiaries will continue to infest our government procurement system if left unchecked. Changes are needed to build and maintain the trust and legitimacy of our government procurement regime. These changes must be specific, deterrent, and ultimately must come from proactive congressional action.
Effective institutions must have the ability to adapt to changing circumstances. This section sets out three possible solutions for how to ensure that our system adapts effectively to gaps the Trump and Obama administrations have illuminated. This Note proposes the following: (1) language be included in the FAR to make it explicitly clear to COs that their decision must be their own independent business judgment, free from any political influence; (2) Congress should explicitly prohibit political interference in contract awards; and (3) Congress should strengthen civil service laws, ensuring job security and independence for the career civil servants who work in government procurement. Insulating COs from their superiors may raise concerns that they are too insulated from necessary oversight and potential removal. However, the integrity and equity of the U.S. procurement regime is better served if congressional action is taken to prohibit and prevent political appointees from unduly influencing the award of government contracts.
The FAR Council should amend FAR 1-102(d) to add the language after “sound business judgment” to include “ . . . , exclusive of political officers, . . . .” This language will emphasize and reiterate that every member of the acquisition team shall exercise their own “personal initiative” and “sound business judgment” free from influence of any political officers who may be pursuing their own personal agendas.
Civil servants have great respect for the role they play in the federal government, and the vast majority seek to follow the rules and guidelines set forth in solicitations and the FAR. However civil servants might view the President as “the boss,” someone to whom they must remain loyal and faithful. This amendment, in practice, aims to encourage the acquisition team to think about their role and how it fits into the complex procurement framework. By utilizing one’s own judgment, and not public statements or internal meetings involving the President or any other political officer, the procurement system’s goals of transparency, integrity, and competition can be achieved.
Furthermore, “presidential prodding” in procurement should be prohibited. As the Court of Appeals for the D.C. Circuit stated in Sierra Club v. Costle, it is always possible that this “prodding” will direct the outcome of an agency rulemaking decision where in the absence of such “prodding” the agency would have come out to a different conclusion. The FAR Council should explicitly seek to ensure that COs have enough independence and discretion to make wise decisions that provide the best value to the government. Nonetheless, this independence should not extend as far as the double-insulating mechanism used in the Free Enterprise Fund.
This proposed framework is constitutional because of the expanded autonomy given to the CO in the contract award decision. This creates a tension with separation of powers principles because it could potentially obstruct the President from faithfully carrying out the law and overseeing his Executive Branch officers. The bureaucratic autonomy and resistance already present in the Executive Branch will be extended if more independence is given to the CO. Rather than autonomy in the general sense of rulemaking and other sources of administrative power, this Note advocates for a specific autonomy in performance of a specific procurement process. This Note is not advocating for civil servant disobedience in any sense. It instead advocates for an internal check through a stronger bureaucracy, which is able to give the President information not selectively filtered by party loyalists, but instead information that is the “product of independent and sober thought.”
To supplement the proposed FAR amendments, Congress should likewise enact legislation that prohibits the political influencing of contract award decisions. The Biden administration promised to do so through executive orders (EO), but EOs are obviously ineffective if repealed by future administrations. Biden promised to issue an EO that prohibits improper influence on specific agency matters, including the award of government contracts, to ensure that they are awarded on the basis of expertise and merit. In reality, EO 13989 is the closest attempt that President Biden has taken to prohibit these types of improper influences on contract awards. It states, in relevant part, that appointees in Executive Branch agencies shall pledge to “commit to decision-making on the merits . . . .” The remainder of the pledge focuses on upholding public trust and banning the “revolving door” between government and lobbying firms. A pledge like this one appears to the author as unlikely to have any effect on the awarding of contracts by COs, as it lacks “teeth” for enforcement purposes.
Still, it is a step in the right direction to create more public trust in the federal government’s expenditure of money. However, congressional action would take this pledge one step further. Enacting legislation specifically outlawing and penalizing political influence on contract award decisions by political officers will have a deterrent effect on the exertion of undue influence in government contract awards. Even if penalties are not attached, the legislation would still create normative standards similar to Congress’s ethical guidelines for gift-giving that all of Members are told they should follow.
Giving political officers an ethical framework that discourages cronyism in contract awards and in the expenditure of taxpayer dollars will be beneficial for the procurement regime. This framework will uphold the integrity of the system by enacting specific deterrent legislation that cannot be repealed at the whim of any future President. This ethical framework is important for the independence of COs to effectively and faithfully carry out the procurement process and ensure integrity and competition for all prospective contractors. This security would allow the COs to focus on their role of acquiring the best goods and services for the federal government, rather than serving the President’s personal agenda. This legislation will continue to enhance trust and faith in our democratic institutions.
Some form of removal protections should be added for COs in specific legislation as well. There are similarities between the independent counsel in Morrison and a CO in that they both lack policymaking and administrative authority. Creating removal protections for the CO would prevent the possibility of repeat terminations until a CO comes along who is willing to do the bidding based on political fancies. The Supreme Court has noted that this removal protection is one of the two exceptions representing “the outermost constitutional limits of permissible congressional restrictions on the President’s removal power.” Therefore, a similar restriction concerning COs would likely be upheld if challenged in court.
EO 13957, entitled “Creating Schedule F in the Excepted Service,” allowed for those in policy-making positions to be hired and fired more easily by reclassifying civil servant workers. Agencies had a greater degree of flexibility than the previous competitive service process to bring new employees into “confidential, policy-determining, policy-making, or policy-advocating positions.” The EO would have helped political appointees bypass the merit-based application process for career civil service jobs, and stripped various rights from career civil servants, leaving them in a category with fewer legal protections. This EO supported a return to the spoils system. Influencing civil servant job security through this EO was a more subtle attempt at reviving the spoils system than the JEDI and Fisher contracts; however, President Biden revoked this EO on his first day in the White House.
Congress should go further by strengthening merit-based application processes for career civil servant positions. It has been alleged that the Trump administration moved politically appointed individuals into career civil service positions based on their affiliations to the Republican Party rather than basing their hiring on their merits. This outcome is in direct violation of the “Prohibited Personnel Practices” that ban “granting unfair advantage to an applicant to help or hurt a person’s chance of obtaining a job.” Correcting failures to adhere to these merit-system principles should be a priority for the Biden administration and Congress. This will likely result in more efficient and effective performance by career civil servants. It is hoped that the civil service will soon be full of more qualified experts ready to serve the federal government, rather than members of a political party.
Separation of powers principles are concrete enough to place checks on each of the different branches but vague enough for different branches to regularly overstep their constitutional boundaries. The President should be able to control his administration, but not be able to direct members of the administration to violate existing procurement laws and regulations. Recent administrations have demonstrated how Presidents can influence the award of public funds and, as a result, negatively impact the integrity and transparency of the U.S. acquisition system.
As a metaphorical “city set upon a hill” for all to observe, the U.S. public procurement system must be free of characteristics that harken back to the nineteenth century spoils systems of America or that are reminiscent of the corrupt autocracies throughout the world. The U.S. procurement framework reflects the gold standard and must not be tainted by an executive that does not understand its intricacies and principles. The source selection decision should be protected and completely insulated from the influence of the White House. Revising the FAR to add specific language excluding the influence of political officers, creating specific legislation that prohibits political influence on contract award decisions, and strengthening civil service laws will protect our procurement system from the potentially corruptive influence a President might impose on a system that must be free, fair, and equitable.
