I. (a). Introduction into the Military Complex
I. (b). America’s faltering foreign policy
I. (c). Corruption Examples
I. (d). America’s Military Recruitment Problem
II. How does fraud happen, without it really “happening”?
III. Boring, Boring, Boring
IV. Basics I.
V. Basics II.
VI. Basics III.
VII. Basics IV.
VIII. Basics V.
IX. Some applicable laws
I. (a). Introduction into the Military Complex
Today, as of 14 March 2023, President Biden suggested his upcoming military budget of $886 Billion dollars. As a veteran (no Rambo) who served myself, an Army brat (ex-military dependent), and having worked for a contractor I can assure you that nothing makes sense, while simultaneously making total sense at the same time regarding the budget. At this point, the US spends so much on the military not because the military is “pound per pound” more efficient as compared to other combatant nations (I only shot a gun once in basic training and not while on active duty), but rather it is mostly a vestige of the World War II Military Complex that was established under FDR, with roots dating back as early as the Lincoln and Grant during and after the Civil War.
It’s basically a Keynesian “demand side economics” jobs program paid for with a mix of taxes, but mostly debt, where the United States can’t escape the addiction because to escape the addiction means to end the Empire, because a contraction is more of a sign to other nations, and signs in a world of image is everything.
For example, have you ever been to Lima, Ohio? No? I haven’t. Exactly. But, guess what, the Lima Army Tank Plant is there. The military complex is everywhere. It’s not simply Lockheed Martin, Raytheon, General Dynamics, Boeing, Saab, Leonardo Spa, Textron, etc., but a web of medium size or small vendors ranging from janitorial services, food vendors, laundry services, mail services (Pitney Bowes), cafeteria vendors (US Foods, Sodexho, etc.), universities who perform testing services, even entertainment via MWR (Morale, Welfare, and Readiness) which is were Hollywood comes into play. Coca-Cola is a military contractor. That seemingly boring office park you see might be full of contractors doing everything for sensitive document disposal, to architectural designs, to urinalysis testing, etc.
It’s everywhere.
In other words, we can’t stop upping the annual military budget because so much of our domestic economy is dependent upon it, as well as our international foreign policy which entails selling our technical expertise to our allies, who in return give us access to their airspace, land, and ports, but also purchases (props up) our debts by buying Treasuries, not debating the petrodollar scheme, etc. We are stuck as the “world’s mercenaries” who provide the best “science fair” productions, i.e., weapon systems.
I. (b). America’s faltering foreign policy
The interesting thing is that the United States is giving up these weapon systems to nations who are playing their own “Games of Thrones” such as Saudi Arabia, i.e., the home of the 9/11 hijackers or Israel, where Israel I would argue has capture US foreign policy, such as preventing the United States from engaging in direct diplomacy, which would theoretically cut China off from Europe since Iran is a land land-bridge connecting China via Pakistan, especially now that the United States is not in Afghanistan, which is Catch 22, because if we staying in Afghanistan we would be spending just as much money/endangering American lives in a nation incapable of being “reformed”. Yet, by leaving Afghanistan, which I hate to admit, per the theory of Zbigniew Brzezinski in The Grand Chessboard the United States is essentially a sideline player, because per the theory of Brzezinski, whomever controls the Central Asian Steppes effectively cuts the world in half, thus “ruling the world”, i.e., the pivot point or bulkhead between West and East.
The irony is that Israel has its own ties with China, so even if the USA is bumped out of “important conversations” (as seen by a growing number of UN votes in China’s favor), the Israelis still can jump to their new “boyfriend” with the Chinese and Russia, etc. China will therefore simply replace the USA as the arbiter of peace negotiations with them financing the Muslim world but the Israelis wanting the lucrative Chinese market to sell their expertise (ironically, partially funded by US joint ventures in the Silicon Wadi for example).
Disclaimer: My opinions on Israel are not meant to be misconstrued as antisemitic because I want Israel to exist, but Netanyahu has been a bane to America’s existence. The Jews deserve to be back in the Holy Land, even though we can of course disagree on the current state of Israeli and Palestinian relations.
The United States toppled Saddam in Iraq, Gaddafi in Libya, nearly took out Assad in Syria, and even disable Iran’s alleged nuclear program with the Stuxtnet Program (where General James Cartwright mysteriously being given the “David Petraeus” Treatment, i.e., accused of sexual misconduct as a means of getting rid of him), but it is still not enough for Israel. At this point, why doesn’t the US have a military base in Israel if we are so needed to kill off Israel’s enemies, which is basically elements within each Muslim and even Christian nation on Earth – let’s be real.
I. (c). Corruption Examples
Yet, it is easy to say the federal government is corrupt regarding contracting such as with the Military Industrial Complex (trust me, I get the frustration). First, let’s define contracting as the process of dealing with contractors/vendors/merchants, i.e., the process of conducting acquisitions, buying, purchasing, etc.. But getting “no bid contracts” without following any rules is possible but harder than expected, luckily thanks to whistleblower protection laws. Basically, if you are stupid enough to defraud at the federal level you deserve what comes to you because it is scary to do contracting for the Federal government.
See the cases of (1) The case of Darleen “The Dragon Lady” Darleen Druyun – Wikipedia, DRAGON LADY’S “MASSACRE” | Military.com (2) famous whistleblower Bunnatine “Bunny” Greenhouse” Bunny Greenhouse – Wikipedia; Watch Whistleblower Season 2 Episode 6: Bunny’s War/Opioid Lollipops – Full show on Paramount Plus, (3) See Navy Contracting Fraud Case https://www.nytimes.com/2013/11/09/us/bribery-case-implicates-2-admirals.html, etc.
The stereotype of corrupt politicians meeting at fancy DC steakhouses where you can get cigars and high paid escorts. But, does this happen? I don’t know; however, I would argue that corrupt contracting/procurement/acquisition/buying practices happens at lower levels of government, e.g., cousin Jedediah with the city purchasing card giving an award for parks and recreation clean up to his niece’s fiancé, or the Brett Farve situation in Mississippi where he was tapping into welfare funds. It is much easier to get away with corrupt contracting practices at local municipal and city government levels because of lack of centralized oversight, which is the same reason America’s policing policies have so many issues, i.e., there’s a separation of federal and state, so local governments are largely shielded from oversight unless they break federal law, i.e., mail or wire fraud, tax evasion, violations of intersection commerce, etc.
However, the federal government has arrested my Contracting Officers for abusing their powers such as the process of getting Kickbacks. I would say that corruption at the federal level happens outside the actual procurement process most of the time but rather during the vendor selection process, particularly no major weapon system programs, i.e., your major international tradeshow and airshow levels.
I. (d). America’s Military Recruitment Problem
America is allegedly undergoing a military requirement problem and I call it baloney. I don’t believe it. The Pentagon which essentially is a hive mind that calculates manpower and strategy, created this supposed problem by doing aggressive “force reductions” even before our withdrawal from Afghanistan. When I served, they let people leave the military before their Military Service Obligations (MSO). The US military thinks an updated version of “Be All you Can be” from our Cold War childhoods will somehow solve this “problem”. Let prior service members join, as well as expand the Reserves and National Guard.
The military has bad recruitment practices. Why are we still asking recruits or pre-service re-entries about marijuana usage when most US states now have it legal, as well our Canadian allies to the north (including for active duty)?
The military literally still asks about something we all know most people do, but if you lie, you’re breaking the law, but if you tell the truth, you need waivers which go on your record. It’s foolish. The military is still asking about marijuana use, yet there is no way of screening for sexual predators based on a questionnaire, which is way worst, e.g., remember the Venessa Guillen case, which is just one case of violence against women that got major media coverage [See: Murder of Vanessa Guillén – Wikipedia].
Further, most jobs in the military I would argue don’t feel like “warriors”, but rather paper pushers or administrators dealing with NCOs and officers who have a culture of “let the sh-t roll downhill”.
I shot a gun once in 4 years, but ironically the military budget is going up. It makes no sense. How are we going to call Airmen, “Airmen”, for example, when most never even ride on a military aircraft (think a C-130 Hercules) such as for trainings to simulate deployments or even being a part of an airborne mission, e.g., doing translation work or Air Battle Manager work on an actual plane for training?
The Taliban and Vietcong did warfare without nearly as much spending as the Americans, and still gave us hell. Instead of saying we’re at a lack of manpower, we need to empower those already in, those in the reserves/National Guard, and even Inactive Ready Reservists to feel like…warriors. I would argue that small NATO nations have more lethal troops as a percentage than the US military does. US Special Forces is a very small community and aviator jobs flying expensive aircraft are reserved for the officer class, with some exceptions for Warrant Officers and enlisted positions. The United States Air Force doesn’t even have a Warrant Officer tier meaning that skilled NCOs are eventually relegated to administrative jobs as opposed to staying has seasoned experts.
The sad truth in my opinion is that people don’t do twenty years because of “patriotism” but because the military provides benefits. There are people getting pensions for 20 years who never saw combat, versus people who saw combat but got out, and their VA compensation may not be as lucrative.
It’s just simply easier to do “raises” rather than to do structural reform in the US military.
II. How does fraud happen, without it really “happening”?
But they get away with the actual procurement via the “evaluation process”, where you can’t buy quality always at the “Lowest Price, Technically Acceptable”, i.e., the lowest price as determined by a competitive acquisition where multiple vendors compete in a “sealed bid” type of process, and where the winning bid feels the criteria of a Statement of Work (SOW) or Statement of Objectives (SOO).
In other words, they know that the big players will always win. So, they are playing by the rules, but the rules of the game are rigged for the big guys, since they are often evaluation on criteria outside of price via “Best Value” Source Selection evaluation criteria such as Past Performance (they’ve done it before), Technical Expertise, the best and most advantageous Warranty, Financial health, etc. Yet, the government does require that contracts comply with Small Business Administration requirements thus ensuring that the “little guy” is looked out for, yet, on certain important requirements, these firms simply can’t compete.
I would not say that federal government is corrupt per se, but rather it’s the equivalent of a Cohen Brother’s movie, i.e., a sort of Burn After Reading, Lost in Translation, Kafka-esque process, where the sheer size of the federal government with its various branches, departments, agencies, federal corporations, etc., are all speaking the same language but via different dialects. Sometimes you get corruption, sure, but mostly higher costs come from sloppy contracting or exhaustion from burdensome processes or cultures of fear within organizations where people are “afraid to raise their hands” for fear of being perceived an “inept” or making a small fire into a large fire.
III. Boring, Boring, Boring
Buying in the federal government is boring and burdensome, but this is a good thing because the slower you go the more likely you are to find errors or to have better bargaining power against suppliers who may want quick awards. Yet, buyers aren’t truly “empowered”. For example, let’s say you have a competition for a fleet of Jeeps for the Secret Service. You compete against five (5) dealerships, where some are registered small businesses, meaning you are sharing the love. You provide a Statement of Work with all the specifications you require, and you have also received questions from various dealerships. You then share these clarifications with all parties so no one has an advantage over the other. You eventually get the quotes back, you share them with the end users who sign off whether they meet the specifications or not, you disqualify some, but you land at the LPTA.
The thing is after you come to the LPTA, sure, you can still negotiate and ask for discounts, but you can’t make the suppliers fight against each other. For example, you go back to the second lowest LPTA and say, “Can you beat $x price”. The second may come back and say sure I can do that or, I can’t meet the price point, but I can give you a two-year warranty as opposed to a 6-month warranty as defined by your specification, and this is better than anything we give to civilian customers (you verify this is true). Or, let’s say the second LPTA comes back with a lower price. You can’t then say to both remaining competent vendors, “This is the last round. Can you beat $x price”, i.e., assuming $x price is the second LPTA. In theory both might go lower, or one might say, “Hey I can’t meet that price”, but at least the buyer would know that he left it all on the field for the benefit of the taxpayer.
You essentially can’t “haggle” like you can in the real world.
IV. Basics I.
The basis of federal contracting is the Federal Acquisition Regulation, but the certain agencies have their own specific supplements to the FAR, for example, you have the FAR, the DFARs (Defense Acquisition Regulation), the AFFARs (the Air Force Acquisition Regulations), etc. Further, if the government is awarding a federally funded taxpayer contract to contractor, who can thereon have its own various subcontractors, the government will require these businesses include “flow-downs”, i.e., certain selected FAR based clauses to be applied into their contracts, which are uniquely selected by the Contracting Officer.
The Contracting Officer (CO) may be one of the most powerful positions you have never heard of, but there’s offices full of them throughout the various agencies and departments. From NASA to the Department of Education, FEMA, the Treasury Department, etc., you have COs.
A CO will likely run their own contract, but in more complex acquisitions you may have a PCO, ACO, or TCO, i.e., a Procurement Contracting Officer, Administrating Contracting Officer, and Termination Contracting Officer.
A CO is granted their authority through delegation of the Executive, i.e., the President, like how a military office is granted their commission by the President. Of course, you never meet the president, but the theory is that all government workers are effectively extensions of the Executive who delegates explicit and implied authority to his workers in the various administrative agencies.
V. Basics II.
Prospective COs on behalf whichever Department they will be working for will takes courses as assigned by an Acquisition Career Manager (like a counselor) from accredited federal bodies such as the Federal Acquisitions Institute (FAI) which is for all federal agencies (except the DOD), which therefore technically falls under the General Services Administration (GSA), or the DAU (Defense Acquisition University) for DOD members, where the DAU trains COs to be in alignment with agencies such as the DCMA (Defense Contract Management Agency) and DCAA (Defense Contracting Auditing Agency). [See: FAI Home | FAI.GOV; DAU Home]
After training, career development courses (CDCs), etc., a person will get their certification such as the FAC-C (Federal Acquisition Certification in Contracting) Level I-III series from the FAI or an APDP (Acquisition Professional Development Program) Level I-III from the DAU.
Once a person becomes a CO, they will be awarded a Warrant, i.e., a Delegation of Authority, which states up to what level of money they are authorized to spend by themselves. Newer buyers of course start low while more seasoned buyers may have multi-million dollar or unlimited warrants. For example, in active-duty military a Contracting Squadron commander might have a very high dollar warrant even though they don’t deal with contracting directly, but rather high-level government-civilian workers or enlisted personnel (the technical experts) do the actual contracting process. Essentially, the commander might serve as the final stamp and oversight, but not really involved in all the details, even though they are being briefed on “hot requirements” which have higher level visibility.
A warrant, i.e., delegation of authority is often issued via General Services Administration (GSA) Standard Form (SF) 1402, i.e., an SF 1402. (See example which is public information: https://www.gsa.gov/cdnstatic/sf%201402_2.pdf) Also see: 48 CFR § 853.201-1 – Contracting authority and responsibilities (SF 1402). | CFR | US Law | LII / Legal Information Institute (cornell.edu)
VI. Basics III.
All contracts entered by the federal government are input into the Federal Procurement Data System (FPDS) which also falls under General Services Administration (GSA) – think of GSA as the “Amazon of the Federal Government. [See: Federal Procurement Data System – Wikipedia]
VII. Basics IV.
So, when a buyer is buying something they to think about the Bona Fid Needs Rule which means that a federal procurement must be for an actual and immediate/foreseeable need, i.e., you can’t spend money necessarily on things because you feel a need, but rather there has to be an actual need; Misappropriation Act which requires that buyers use the correct “Color of Money” when buying something. Finance Departments help with this by coding “Lines of Accounting” with the proper pool of funds, fiscal year, location, etc.; the Anti-deficiency Act of 1982 which is asking “Do you actually have money”, and you can’t spend more than you are given.
Funding is also dependent upon the Federal government’s fiscal calendar which ends every 30th of September and begins every 1st of October. In theory, how it works, (I am assuming here) that by 15th April is when taxes are due, but between then and Oct 1st, I would assume that the Treasury sees how much “liquid cash” it can collect and how much debt it needs to underwrites, and for the debt it underwrites (Treasuries) then get sold at “auctions” with most purchased by the central bank to “insure” the “printing” of new money if necessary, then from there we have a fresh sources of cash comprised of a bundle of tax money and money printed (new debt), to be spent, i.e., recycled within the system – thus giving that currency “life” – to keep the next year going. When Treasuries mature, the Treasury then pays the Federal Reserve which helps the Fed Reserve clear the bonds off its balance sheet, if necessary, if the Fed Reserve hasn’t already sold them for profit elsewhere, i.e., such as to other central banks, mutual funds, etc.
The government is very strict about not crossing fiscal years because after each year expires, the appropriate funds are returned to Congress. Three questions of do you have funds?, and are you using the right bucket of money?, and is the need immediate? For multi-year contracts that span multiple fiscal years, contracts are designed to have “options” (think of it like a sports contract), e.g., Base Plus Three means you have a base year with three potential option years (where proposals are evaluated en masse prior to award), where Procurement Offices will either exercise or not exercise an upcoming year by notifying a supplier within an agreed upon time-frame. Once October 1st comes, the Contracting Officer will issue a modification to add the new years money, etc.
VIII. Basics V.
Once the buyer establishes these criteria, then it’s about how do you buy? Technically an RFQ is different than a RFP, i.e., Request for Quote versus Request for Proposal, where an RFP will fall under FAR 15 for Source Selection (higher dollar PO’s – purchase orders, typically services, where there’s complex evaluation criteria, including the possibility of needing a Source Selection Board), whereas an RFQ will fall under FAR Part 13 for Simplified Acquisition Procedures, i.e., falling under the Simplified Acquisition Threshold (varies from year to year sometimes).
A construction-based Invitation for Bid (IFB) will fall under FAR Part 14 relating to the Sealed Bidding process. Further, FAR 8 relates to Mandatory Sources of Supply which establishes the order of precedence for which to by from, with the first source of supply technically being Agency Inventories, i.e., if the Army has extra desks, then technically the USAF should be getting those; however, no one really follows this and instead agencies go with other sources, such as General Services Administration, Federal Prison Industries (now called Unicor), Ability One (a successor to the National Institute for the Blind and Severely Handicapped, i.e., NIB NISH), and then General Service Administration schedules found on sites such as GSA e-Buy, GSA Advantage, etc.
Then if you can’t find your items or services via these services then you can go into the “marketplace” by position a notice, solicitation, or combination of both (FAR Part 13) via the Government Point of Entry (GPE), i.e., Federal Business Opportunities.
Oral quotes are often looked down upon, but simple acquisitions can include all solicitation details in an email, where as more complex acquisitions require forms such as SF 1442 (construction) or SF 1449s (commodities and services).
For suppliers to get access to federal bids they need to register for codes such as NAICS Codes (North American Industrial Classification Standards) which determines what type of industry they truly fall into, CAGE (Contractor and/or Commercial and Government Entity codes), Federal Supply Codes (FSC), PSC (Product Supply Codes), etc.
IX. Some applicable laws
- United States Code which is where most the “guts” of the FAR derives from [See: FAR | Acquisition.GOV and U.S. Code: Table Of Contents | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu)]
- Office of Federal Procurement Policy Act
- Defense Acquisition Workforce Improvement Act (called DAWIA) [See: Defense Acquisition Workforce Improvement Act – Wikipedia],
- Competition in Contracting Act [See: Competition in Contracting Act – Wikipedia],
- Truth in Negotiations Act which requires that a contractor certify the cost and pricing data in their proposal are accurate, complete, applicable, current, etc. [See: 10 USC Ch. 271: TRUTHFUL COST OR PRICING DATA (TRUTH IN NEGOTIATIONS) (house.gov)]
- Davis Bacon Act of 1931 which relates to federal construction contracts to ensure workers are being paid fair “prevailing” “at a minimum” wages [See: Davis–Bacon Act of 1931 – Wikipedia]
- The Miller Act of 1935 which requires contractors doing construction to government real property post surety bonds, i.e., bonds which allows a party to seek damages in the event of nonperformance, to insure they can finish projects (performance bonds) and pay workers and subcontractors (payment bonds), etc. [See: Miller Act – Wikipedia]
- The Barry Amendment of 1941 which requires certain sources be sourced (shopped for) from domestic sources only [See: Berry Amendment – Wikipedia]
- The Brooks Act of 1972 which requires that Architecture and Engineering services be based on quality, expertise, design, etc., and not price. A&E contracts come before construction which will then fall thereafter to Davis Bacon, Miller Act, etc. [See: Brooks Act – Wikipedia]
- Defense Priority Act of 1950 which essentially allows the President to direct domestic manufacturing to defense and national security. Under this Act, you have the DPAS, i.e., Defense Priority Allocation System which rates contracts (purchase orders, or equal) on priority, i.e., a certain rating might require the manufacturer to make and deliver items or complete services within a mandatory fixed amount of time. This DPA may be used in tandem with the Stafford Act relating to Emergency Preparedness [See: Defense Production Act of 1950 – Wikipedia, Defense Priorities & Allocations System Program (DPAS) (doc.gov), DPAS Training Slides Final_November 2021.pptx (live.com). Stafford Act, Stafford Disaster Relief and Emergency Assistance Act – Wikipedia]
- Anti-Kickback statute which prevents “pay for play” in contracting. [See: Anti-Kickback Statute – Wikipedia]
- False Claims Act, which prevents contractors from submitting false claims for damages against the Federal government, i.e., think Medicare Fraud by shady Florida doctors, etc. [See: False Claims Act – Wikipedia]
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