Nomination of James A. Williams
Floor Speech
NOMINATION OF JAMES A. WILLIAMS -- (Senate - July 24, 2008)
Mr. GRASSLEY. Mr. President, today I rise to express my opposition to the nomination of Mr. James A. Williams to be the Administrator of the General Services Administration, GSA. My concerns are based on my investigation of a dubious GSA contract with Sun Microsystems. In 2006 and 2007, my oversight staff conducted a thorough inquiry into the GSA Multiple Award Schedule contract with Sun Microsystems for computer products and services. GSA inspector general, IG, auditors had alerted GSA's top management of alleged fraud on this contract as early as 2005.
In 2006, Mr. Williams became the Commissioner of the GSA Federal Acquisition Service, FAS. His office was directly responsible for this questionable contract with Sun Microsystems. He and Administrator Doan were alterted to the alleged fraud and the referral of the matter to the Department of Justice, DOJ.
I previously made the findings of my inquiry known in a floor statement on October 17, 2007.
In a nutshell, all the evidence developed in my oversight investigation appears to indicate that top-level GSA management, including Administrator Doan and FAS Commissioner Williams, may have improperly interfered in the ongoing contract negotiations with Sun Microsystems in May-September 2006; and Administrator Doan and Mr. Williams pressured the GSA contracting officer to approve the new Sun contract even though they both knew that the IG had detected alleged fraud on the existing Sun contract and had referred the matter to the DOJ for possible prosecution/litigation. This case is now pending in Federal court.
The facts appear to show Mr. Williams, as FAS Commissioner, failed to act in the best interest of the American taxpayer. He had the opportunity to put an end to or bring into compliance a contract that was allegedly fraudulent, but in the end he could not do it. Instead, he sided with former Administrator Doan by taking steps to remove the GSA contracting officer. When the final contract was signed with Sun Microsystems by a newly appointed contracting officer, he chose to look the other way. He didn't even try to have the IG audit or examine the terms of the proposed contract. At the very least, this was a very poor management decision by Mr. Williams. It was a deplorable error in judgment that he probably regrets today.
We need a strong leader at GSA. The responsibilities of GSA Administrator require an individual who will stand up to anyone to protect the financial interests of hard-working American taxpayers. Although I agree he is well qualified and a devoted civil servant, I don't believe Mr. Williams has the bureaucratic and intestinal fortitude to make the tough decisions at GSA when it matters.
Reports of alleged fraud on the Sun contract surfaced on his watch. He knew about the alleged fraud. The taxpayers may have been cheated out of tens of millions of dollars. As FAS Commissioner, he was the top GSA official responsible for making the tough calls, and he chose not to protect the taxpayers. He made the wrong choice. He is now accountable for that decision. Because he failed to protect the taxpayers at a crucial moment, we should not elevate Mr. Williams to high office.
For all these reasons, I oppose his nomination to be GSA Administrator.
Mr. Williams's nomination is now before the Homeland Security and Governmental Affairs Committee. On July 22, I wrote to the chairman, Senator Lieberman, laying out the reasons behind my opposition to this nomination.
I ask unanimous consent to have that letter printed in the Record.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
U.S. SENATE,
COMMITTEE ON FINANCE,
Washington, DC, July 22, 2008.
Hon. JOSEPH I. LIEBERMAN,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC.
DEAR SENATOR LIEBERMAN, I am writing to express opposition to the nomination of Mr. Jim Williams to be the Administrator of the General Services Administration (GSA).
My opposition to Mr. Williams' nomination is rooted in an in-depth oversight investigation conducted by my staff in 2006-2007. This investigation focused on the re-negotiation of a Multiple Award Schedule contract with Sun Microsystems, Inc. for computer products and services. The contract was initially awarded to the company in 1999. Sales on this contract totaled $268,987,689.00.
The results of this investigation were presented in three separate reports in October 2007. These reports were provided to your committee, Administrator Doan, the House Oversight Committee, the White House Chief of Staff, and GSA Inspector General (IG). In addition, there was a follow-up report issued by the U.S. Postal Service in May 2008. None of these reports have been released to the public. However, on October 17, 2007, I spoke about the findings in these reports in very general terms on the floor of the Senate. My remarks appear on pages S12952-12954 of the Congressional Record.
At the time of my investigation, Mr. Williams was the Commissioner of GSA's Federal Acquisition Service (FAS).
In a nutshell, all the evidence developed in my oversight investigation appears to indicate that: 1) top-level GSA management, including Administrator Doan and FAS Commissioner Williams, may have improperly interfered in the ongoing contract negotiations with Sun Microsystems in May-September 2006; and 2) Administrator Doan and Mr. Williams pressured the GSA contracting officer to approve the new Sun contract even though they both knew that the IG had detected alleged fraud on existing Sun contract and had referred the matter to the Department of Justice (DOJ) for possible prosecution/litigation.
The IG auditors first blew the whistle on alleged fraud on the Sun contract in 2005--at least a year before Mr. Williams became FAS Commissioner.
The GSA IG auditors had the Sun contract under a microscope for several years. They had uncovered extensive contract violations, including potential civil and criminal fraud. These problems were first reported to GSA acquisition management in February 2005. The IG auditors briefed DOJ on the alleged fraud on April 20, 2006. In April 2007, DOJ charged Sun in a False Claims Act suit. That case is now pending in the Arkansas Federal Court District (Norman Rille and Neal Roberts vs Sun Microsystems, Inc.).
The GSA IT Acquisition Center staff was briefed on these issues on May 2, 2006. FAS Commissioner Williams ``grilled'' the IG auditors about the alleged fraud and DOJ referral during the contract ``Impasse'' briefing on August 14, 2006. On August 29, 2006, Administrator Doan was briefed by the IG audit team on the decision to refer the Sun contract to DOJ for possible prosecution/litigation. Mr. Williams and Ms. Doan discussed the alleged fraud on the Sun contract on several different occasions in August 2006.
Despite the red warning flags raised by the IG auditors, according to my findings, Administrator Doan and Mr. Williams pressured the GSA contracting officer to sign the contract. When that person refused to sign the contract, they had the contracting officer removed and replaced under duress.
The record shows that Mr. Williams played a key role in the removal of the contracting officer as follows:
A high-level meeting--known as the ``Baltimore Conference Call''--was held on August 31, 2006. All the key players participated, including Commissioner Williams. According to interviews with a number of participants, Mr. Williams made it very clear that the Sun contract was of ``strategic importance'' in Administrator Doan's view, and it had to be awarded. Still, the contracting officer refused to back down in the face of mounting pressure from the very top. He had dug in his heels and refused to sign what he considered a bad contract. During interviews, the contracting officer told my staff that he thought the price reduction clause, discounts, and maintenance deals offered by Sun were ``essentially worthless,'' and he said he was equally concerned about the alleged fraud referral to DOJ. Mr. Williams then asked the contracting officer if he wished to step down, and the contracting officer accepted the offer.
Under standard GSA procedures, contracting officers make the final decision on whether or not to sign a contract. They have ``Go No Go'' authority. No other person is authorized to preempt or otherwise interfere with that authority. So when the contracting officer said ``No'' on the Sun contract, why didn't that mean ``No''? Why didn't the story end there?
One of Mr. Williams' directors suggested that the ``Impasse'' in the negotiations was caused by the intimidation of the contracting officer by IG auditors. On September 5, 2006, in response to that complaint, Mr. Williams lodged a quasi-formal complaint with the IG, alleging that the IG auditors had made threatening statements to GSA contracting officers.
Mr. Williams' complaint of IG auditor intimidation came just five days after the contracting officer was removed and four days before the new contract was signed. Mr. Williams also passed these allegations to Administrator Doan.
Mr. Williams' allegations of IG auditor intimidation were examined in detail by the GSA IG, by my staff, and by the U.S. Postal Service IG. There is not one shred of evidence to support those allegations. They appear to have been bogus allegations. A senior official in the IG's office suggested that Mr. Williams' allegations regarding IG auditor intimidation were ``a smokescreen for things going on in the agency itself.''
After forcing the contracting officer to step down, GSA management appointed a new one. It took her just nine days to negotiate a final deal with Sun. In interviews, the new contracting officer claimed that she did not need to talk to the IG auditors who had years of knowledge on the contract. She said that she could solve the impasse in the negotiations by listening to the contractor. Many of the provisions she accepted were ones steadfastly opposed by the previous contracting officer--the very same terms that led to the so-called ``impasse'' and the removal of the previous contracting officer. She even admitted during questioning that she did not fully understand key provisions in the contract she signed. She admitted making ``big oversights'' in some of the contract terms. I found these revelations very disturbing. They raised questions about the motives behind her appointment. She later received a $1,400 cash award for signing off on the Sun contract.
Following my staff's interview of the new contracting officer, I had grave concerns about the new contract. Was Sun continuing to cheat on government discounts mandated by the price reduction clause--as feared by the IG auditors? I thought I would be remiss in not asking more questions. Consequently, on June 5, 2007, I asked the IG to conduct an audit of the new contract. Since Sun claimed it was such a ``good deal for America,'' I felt sure the company would rush to cooperate. How wrong I was! For three months straight, Sun stonewalled and procrastinated. Sun withheld information. Sun fought the audit tooth and nail every step of the way. They even lashed out at the GSA IG. Then suddenly and unexpectedly, on September 13, 2008, Sun canceled the contract. What happened? Why would Sun cancel a contract it had fought so hard to get? Was Sun trying to avoid the audit? Did Sun have something to hide? Something about this just does not smell right.
Mr. Chairman, Mr. Williams was the Commissioner of GSA's Federal Acquisition Service at the time of the Sun/GSA contract debacle. That made him the top dog overseeing and managing the procurement of computer equipment and services for the whole government. The Sun Microsystems contract was being re-negotiated right under his nose. He was the top official accountable for that contract. When he was informed in August 2006 by IG auditors about the alleged fraud on the Sun contract and the DOJ referral decision, he should have brought the Sun contract negotiations to a screeching halt. He should have called for a comprehensive, independent review and/or audit and assessment of Sun's corrective action plan. He should have carefully weighed the gravity of the fraud allegations before proceeding any further.
Mr. Chairman, instead of heeding all the IG's warning signals, Mr. Williams pushed the throttle to the firewall at Administrator Doan's direction. The record shows pressure was put on the contracting officer to sign a potentially bad contract. When the contracting officer refused to bend under pressure, Mr. Williams involved himself directly in the contracting process. He participated in the decision to remove that contracting officer from the Sun contract negotiations. His actions eliminated the last standing barrier to contract approval. In doing these things, he may have improperly interfered in the contracting process and hurt the taxpayers.
The alleged contract violations and alleged fraud on the Sun contract, which supposedly occurred over a long period of time, may have wasted tens of millions of dollars in taxpayer money. Mr. Chairman, there must be more accountability in the government contracting process. Elevating those who have been detrimental to this process would certainly be anti-accountability and anti-taxpayer. That would clearly send the wrong message to the whole contracting community.
For these reasons, I intend to oppose the nomination of Mr. Williams to be the next Administrator at GSA, and would expect your Committee to do so, too.
Your careful consideration of my concerns would be appreciated.
Sincerely,
Charles E. Grassley,
Ranking Member.
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