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Public Statements

Accountability in Contracting Act

Floor Speech

Location: Washington, DC



Ms. HIRONO. Mr. Chairman, as a cosponsor of H.R. 400, introduced by my colleague from Hawaii, the Honorable NEIL ABERCROMBIE, which seeks to prohibit war profiteering, I support H.R. 1362 which champions the same goals.

At a time of war, when the lives of Americans are put at risk, when the limited resources of the Nation are being expended and when programs serving millions of Americans are being cut back, no corporation or person should ever be allowed to misuse, waste or misappropriate Federal tax dollars. Unfortunately, due to mismanagement, incompetence and sweetheart deals, and lack of oversight, certain U.S. corporations and their subsidiaries apparently have blatantly over-charged government agencies, engaged in wasteful practices and committed allegedly fraudulent acts that have resulted in the virtual disappearance of billions of dollars.

Examples of American corporations padding expenses then charging an administrative fee on top of the overpriced goods and services have been well-documented. Documentaries such as ``Iraq for Sale'' chronicle a chilling story of unchecked waste, demoralization of our troops from shoddy services provided by contractors and shameless acts of corporate misconduct.

It is shocking that, in some cases, it's all legal. Without reasonable restrictions on contractor spending and practices on no-bid and cost-plus contracts and lack of enforcement of existing law, there is no incentive to provide goods and services to the government at the least cost and with the greatest efficiency. Indeed, the current practices foster and encourage waste and corruption, as the dismal track record in Iraq of defense contractors demonstrate. Just one corporation, Halliburton, has disputed charges amounting to over a billion dollars.

This bill minimizes the use of no-bid contracts, promote the use of cost effective fixed-price contracts and limit the duration of no-bid contracts, which must be awarded under emergency conditions, to one year. This bill allows the awarding of no-bid contracts which cannot be delayed but require re-bidding when the emergency has elapsed. Public disclosure of the reasons for using no-bid contracts and overcharging will promote transparency and expose improper contracting practices. Fixed price, rather than open-ended cost-plus, contracts will encourage efficiency and minimize unrestricted spending by contractors.

H.R. 1362 will go a long way to curb unchecked abuse and overcharging, slipshod accounting practices and lack of accountability. It will give government procurement managers the authority to control wasteful and fraudulent contractor practices, as well as be governed by stricter ethical guidelines to regulate the procurement managers' own behavior.

Until now, there has been no effective congressional oversight since the war began and no effective laws to rein in wasteful, corrupt and, in fact, unpatriotic behavior. Billions have been lost in this war, while critical programs in education, health, environment, alternate energy and other domestic needs have been unnecessarily slashed.

This legislation will help correct this unacceptable situation. I commend Chairman WAXMAN and the Committee on Oversight and Government Reform for this important improvement in our Federal contracting laws.


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