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Family Problems: Taxpayers Pay for Conflict of Interest

“I’m so uncomfortable here.”

“I really shouldn’t be here. Oh my God, I shouldn’t be here.”

These were the quotes of a Project Manager who served on the Market Survey Team (MST) evaluating property sites for a new Department of Veterans’ Affairs (VA) healthcare center, after she realized that properties to be reviewed included those owned by her extended family member.

After uttering those words, the Project Manager effectively left it at that. Rather than recuse herself from the evaluation process due to the appearance of impropriety, the Project Manager instead participated in the selection and provided scores for the land she thought most suited the project. Later, when her family member was selected, a staff member of the local newspaper queried the VA, asking how the Project Manager’s position as the assistant chief engineer wouldn’t have been able to sway other committee members. The VA never responded to this inquiry.

Following a thorough investigation, in a 28-page VA Office of Inspector General Report (OIG) released on March 10, 2015, the VA OIG found that while there was no actual conflict of interest, the Project Manager’s action of not recusing herself from the source selection created the appearance of a conflict of interest.  The VA also found that the Project Manager’s supervisors erred by not conferring with an agency ethics official prior to allowing the Project Manager to participate in the selection.

The VA OIG issued a recommendation that the Deputy Under Secretary for Health and Operations Management determine whether “appropriate administrative action” against the Project Manager and her supervisors was necessary. It also recommended that the involved individuals take refresher ethics training directly related to the matters described in the report. Last, it prodded the VA’s Office of General Counsel to “review this entire matter from start to end.”

Maybe it’s just me, but this entire situation seems like an incredible waste of tax dollars. I’m not suggesting that this situation did not warrant investigation, but that the situation never should have existed in the first place. Not only did this Project Manager know about the possible conflict of interest, but so did numerous individuals involved with the source selection. Despite this, the Project Manager’s involvement continued, and the result is an extensive investigation that surely cost tens of thousands of dollars, as well as a costly review of the matter by the VA’s General Counsel. This is not to mention the considerable time the VA has wasted – not only by the hours spent investigating the impropriety, but by the time spent by the employees in ethics training.

And I have to ask – is it really necessary to tell someone that evaluating a proposal submitted by their family member might look a bit shady?

In the future, when a procurement official’s first statement while being led to the selection table is “oh my God, I shouldn’t be here,” maybe the second statement should be, “I’ll see you all later.”

Access the VA OIG report on this matter VAOIG-12-03002-102.pdf.

Did you find this article informative? If so, access Sarah Schauerte’s legal blog on veteran and small business issues at: https://legalmeetspractical.com.

2 Responses to “Family Problems: Taxpayers Pay for Conflict of Interest”

  1. I have 41 years of Government Service. The last 20 as a Contracting/Grants Officer. I observed numerous unethical actions during my service and reported many of them through my chain of command.
    Nothing was ever done to reprimand/punish anyone involved. Matter of a fact I was told to keep my mouth shut and mind my own business on several occasions. I was in attendance at a major program office meeting once and objected when the discussion centered on ways to avoid competition. I suggested ethics training for all program personnel and following the meeting was told not to attend any more program meetings by the program manager. In my current position as a Veteran Counselor I have encountered several inappropriate/unethical situations involving government procurement personnel and encouraged my clients to report these actions through official channels, again nothing ever happens to the people involved. Until actions have consequences and managers quit paying lip service to obvious violations and just winking at violations of procurement regulations, these unethical and often illegal actions will continue. The current government procurement environment is out of control and program managers and contracting officers are pretty much bending/breaking the rules as they please.

  2. John, thank you for such a thoughtful comment. I would also say thank you for bringing awareness of the issue to the public, but you’re right – everyone knows that these types of things go on all the time but very (very) rarely is anything actually done.

    Recently, however a senior executive at the USPTO stepped down for violation of the statute against using one’s office for private gain, but honestly, even though I blog about these issues and champion government accountability, given the facts it was the one instance where I thought the punishment was far too harsh and that the government should spend its time on other matters. Here’s the link to the story on that one: http://www.law360.com/articles/575037/embattled-uspto-trademark-chief-deborah-cohn-to-retire.

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