A couple weeks ago, a subcommittee of the Senate Armed Services Committee held a hearing on the Pentagon's "revolving door." Senator Elizabeth Warren, the chair of the committee, produced a report with some good anecdotes and an awesome title—"Pentagon Alchemy: How Defense Officials Pass Through the Revolving Door and Peddle Brass for Gold". The hearing and the report naturally led to some guffawing from industry. It is all a very interesting policy discussion.
As we've talked about before, there are a range of legitimate and illegitimate reasons (not legal or HR advice!) why a federal contractor might hire a former federal official. Sometimes a federal contractor hires a former federal official because of her skill and knowledge, and that's generally viewed as perfectly fine! Sometimes a federal contractor hires a former federal official because she can be an sort of "influencer" and things get murky. Sometimes it's a sort of backdoor kickback and that's obviously bad. These categories aren't fixed, and they operate on a sort of spectrum, but the point is that there are good and bad reasons for the revolving door.
Anyway, Senator Warren's opening statement focuses on the murky category of influence peddling:
A preferred strategy is to hire former Pentagon employees to put together the bids and then to present them to their former colleagues in Government. After all, if a defense industry staffer used to work in the next cubicle over from a Pentagon acquisitions officer, there is a better chance that the industry staffer can get his phone calls and emails returned. A better chance the industry staffer can schedule a sales pitch.
A better chance that the sales pitch will go well. And with all the latest intelligence on what the department wants to fund, the industry staffer who just left the Department of Defense, has the best possible chance of turning former friendships into dollar signs for the defense industry.
From a federal contracting perspective, this isn't quite how this plays out. Scheduling a sales pitch with a contracting officer is a surefire way to piss off that contracting officer. But whatever, it's fine; the basic premise holds.
A weird dynamic is that, although much of the focus of the hearing and the report are on former senior officials who become lobbyists and executives, the practical reality is that many (most?) lobbyists and senior officials don't have the foggiest idea of how government procurement actually works in practice, let alone know how to meaningfully influence specific buying decisions.
The very next day after the hearing, a GAO protest came out that dealt with the realities of former senior officials and government contracts, and it sort of proves my point. It's just delightful.
In that protest, Skyward IT Solutions, LLC, the losing bidder alleged that eSimplicity (the winner) "had an unfair competitive advantage stemming from its engagement of a former agency official as a consultant to assist in preparing its quotation."
That former agency official, referred to as "X", was "formerly the director of the Data Systems Group (DSG) in the Center for Medicaid and CHIP Services and oversaw the T‑MSIS program, and X assisted eSimplicity in preparing its quotation shortly after X resigned from CMS. For example, the protester contends that X had access to the independent government cost estimate (IGCE), which was not publicly available, and that X leveraged nonpublic, competitive information about T‑MSIS in advising eSimplicity about its approach to delivering pilots to the states."
Essentially, the main allegations are that (1) X oversaw the T-MSIS program and (2) basically could, in Senator Warren's parlance, help eSimplicity put together the most effective sales pitch for the T-MSIS program.
But Skyward IT ultimately lost because (1) the agency investigated whether eSimplicity gained an unfair advantage by hiring X; (2) the agency concluded that they didn't; and (3) GAO upheld the agency's decision.
And the factual findings of the investigation are fabulous. The Contracting Officer found that X did have access to many of the documents, but they were just drafts and they were not finalized until after X left the agency. The CO went further, though:
Additionally, X represented that while she participated in regular meetings that discussed all of DSG’s active and future procurements, including schedules, potential contract vehicles, and status of solicitation documents, X did not recall specific information because X was “frequently multi‑tasking during these meetings.” X also asserted that she left “[s]pecific contract strategy and decisions about contract vehicles . . . in the hands of the contracting officer."
The former director of DIS explained that she kept X, who was her supervisor, apprised of the T‑MSIS procurement as a part of her routine duties, but that she, the deputy director of DIS, and the contracting officer’s representative “created the bulk of the documentation” for the procurement. The former director of DIS also explained that the solicitation draft went through significant edits between January and March 2022, and that she had no contact with X, except when X attended the former director’s “going away” party. The current DIS deputy director also confirmed that the solicitation was finalized after X’s departure from the agency and that specific decisions pertaining to the solicitation were made at the division level by DIS.
Y'all. I just love this protest because it 100% tracks with my experience of how these things go in real life.
An executive went to the meetings but she didn't pay attention because she was too busy staring at her laptop responding to emails and checking out LinkedIn? Check.
The subordinate director and deputy director and contracting officer did most of the work on all of the documents? Mmhmm.
Even the bit about the "going away" party is just so real. I don't know where CMS's going-away parties happen, but every agency has its spots.
In my lived experience, most senior officials in government are pretty far away from the actual work and engage in a silly amount of context switching. Do they really have "competitively useful" information for a procurement? In this case, the CO and the GAO reached a pretty straightforward conclusion: nope!
So, yes, it's true that, sometimes senior officials can turn around and peddle influence back at their agency. And I'm glad ethics folks take these policy debates seriously. But sometimes, the facts bear out that those senior officials that everyone's worried about are actually of limited competitive usefulness!
And, at least in this case, it worked out that the limited competitive utility of the senior official meant that she could multitask her way right through the revolving door.
Them's the breaks!