FAA Tightens Reins on Services Acquisitions Federal Aviation Administration chief Marion Blakey has ordered tighter controls on services contracts and other “changes in the way we do business” as the Transportation Department’s inspector general investigates potential waste, fraud and abuse in the agency’s procurement practices. In an Aug. 11 memo, Blakey told agency managers that because of tight budgets and expanded responsibilities, “we simply must control our expenses, one of the largest of which is our services contracts, and we must also ensure that every taxpayer dollar is spent wisely, effectively, and properly.” The FAA spends about $1.3 billion annually on services, much of it through three multiple-award umbrella agreements with pre-qualified contractors. The agency operates under its own procurement rules, outside the Federal Acquisition Regulation. The umbrella agreements “are designed to allow us to get the job done expeditiously for the taxpayers and to cut down on unnecessary bureaucratic review,” Blakey wrote. “But it is also important to emphasize that we must always get the job done right – which means adhering to the highest possible ethical standards and being responsible stewards of the taxpayers’ money.” (Emphasis in the original.) Among the new controls: *Sole-source contracts for support services over $1 million are prohibited unless approved by the deputy administrator. Blakey said sole source awards “must be held to a higher standard.” The deputy administrator will also review any proposed services contract that receives fewer than three bids. *All procurements over $10 million require written approval by the chief financial officer. *All program officials and contracting officers will undergo mandatory ethics training. Blakey also emphasized the need to “ensure that there is a good business case for the services being acquired… that they don’t overlap or duplicate services being acquired elsewhere in the agency… that the FAA has the expertise to monitor the contractor’s performance… and that we have a solid, well documented rationale for selecting the contractor.” She said more policy guidance will be issued in the coming weeks: “Some of these will require changes in the way we do business, but I am convinced these moves are necessary.” Blakey said the IG has notified her of “some specific examples of potential waste under the umbrella agreements.” FAA spokesman Greg Martin told Set-Aside Alert the IG investigation is still in progress, On May 12 Senate Finance Committee Chairman Charles Grassley (R-IA) asked the IG to investigate a contract with Crown Consulting Inc., a graduated 8(a) firm in Washington. Grassley said he had been told of “potential waste, fraud, conflict of interest and inappropriate political influence” in connection with the contract. The Washington Post reported Aug. 14 that an FAA contracting officer had raised questions about Crown after she found evidence that the company had billed the government for trips to Las Vegas and rental of a Porsche Boxster and that the wife of a high-ranking FAA executive worked for the company. Grassley said the contract was terminated for the convenience of the government. The company denied any wrongdoing. In a letter to Blakey, Sens. Grassley and Tom Coburn (R-OK) asked for more details on the agency’s services contracts and on the changes. “Taken as a whole these reforms present an opportunity for the FAA to exercise greater financial and managerial control over support service contracts,” they wrote. “However, there are significant differences between recommending reforms and implementing reforms.”