#USA – How the Revolving Door in Washington Spins Between Government and Industry


For years, it has been common practice for federal contractors to hire former government officials. And in many cases, such hires make sense given the expertise that former government officials can bring to a contractor seeking to better understand how decisions are made inside government.

On rarer occasions, however, federal contractors have become the subject of unflattering attention after hiring former government officials due to the nature of the contracts drawn up for those former officials and, in some cases, the background of the individuals involved. Watchdog groups sometimes claim that these hires taint the contract bidding process and jeopardize the integrity of critical government agencies.

Big Tech is no stranger to controversy in this arena. In 2015, Microsoft was awarded nearly $200 million in defense contracts from the Department of Defense. That same year, a former Navy Rear Admiral, who had served both as a Commander as Commander of the Naval Supply Systems Command and Chief of Supply Corps, was brought on as a general manager for the company’s new Cloud supply chain, prompting questions about appropriateness of the hiring.

In 2018, Google came under fire after news emerged that it had enlisted former Obama administration officials to facilitate the procurement of lucrative defense contracts. Reports showed that WestExec Advisors—a consultancy made up of individuals who had held prominent positions within the Obama administration—had been created to leverage connections in both Silicon Valley and the Pentagon, with the goal of streamlining the awarding of these contracts to their clients. WestExec worked with Google to land several major contracts, including coveted work on Project Maven, which was tasked with designing artificial intelligence systems for drones.

Then there’s the case of IBM, which has drawn similar scrutiny for their hirings of former government employees. Between 2009 and 2016, the company hired at least four high-ranking military officials. The individuals—who included officers from the Geospatial Intelligence Agency, the Navy and the DoD—all joined IBM within months of their resignations from their previous positions. And the timing of the new hires coincided with the awarding of a $65 million defense contract to IBM in Afghanistan at a time when the tech company was not generally associated with defense contracting work.

But these stories are not new – nor do they only involve American companies. Agility, the Kuwait-based logistics company, and one of the biggest recipients of DoD contracts in the MENA region, has continuously benefited from lucrative contracts and strong relationships in Beltway policymaking circles.

In 2005, Agility was investigated by federal authorities after it allegedly acquired advance copies of a DoD request for proposal. Later, in 2009, the company was indicted on criminal fraud charges for overbilling the DoD approximately $375 million as part of a contract to supply American troops in the Middle East with food and other essential supplies.  Following the indictment, the company admitted to criminal conduct, gave up claims it valued at up to $249 million and agreed to pay $95 million as compensation to the U.S. government.

Throughout this period, the company hired former U.S. defense officials to help secure new contracts or extend the terms of existing agreements. In 2009, Agility named former US Ambassador to Iraq John Negroponte to its board of directors. In his new role, Negroponte was tasked with helping extend Agility’s existing defense contract. And in the years leading up to Negroponte’s appointment, Agility also hired the former director of the Defense Logistics Agency (DLA)—which had awarded Agility its existing contract— to head a group that was also involved in negotiating for contract extensions. Following both hirings, and despite already having an agreement with a competitor to take over the contract, the DLA abruptly canceled the agreement and extended its contract with Agility.

And Agility is by no means alone. KBR—an American engineering, procurement and construction company—for example, has also drawn attention for some of the problematic hirings it has made from the public sector. In 2017, the company appointed a former Air Force Lieutenant General to serve on its board of directors.  The general, Wendy Masiello, had served as Director of the Defense Contract Management Agency prior to her retirement where she oversaw the bidding process for thousands of contracts worth $6 trillion. Coincidentally the company received over $1 billion in new contracts the same year Masiello was appointed to her new role at KBR.

For many, the U.S. government’s relationship with contractors should focus on ensuring the stability of existing contracts and streamlining the contract bidding process—particularly when these agreements have national security implications. But this may prove difficult as more attention is drawn to issues of misconduct, unethical hirings and favoritism in the awarding of critical work.

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Tags: Agility, Big Tech, Defense Logistics Agency (DLA), Department of Defense., federal contractors, Google, high-ranking military officials, IBM, John Negroponte, KBR, Microsoft, Naval Supply Systems Command, Pentagon, Silicon Valley, USA, Washington, Wendy Masiello, WestExec Advisors

Category: A Frontpage, Google News, US





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