In February 2012 the Inspector General (IG) at the US Department of Defense released a report [PDF] finding that DOD had awarded hundreds of millions of dollars in Service-Disabled Veteran-Owned Small Business (SDVOSB) program funds to potentially ineligible contractors. The IG also found $1.3B worth of additional contracts that were inaccurately coded in the Federal Procurement Data System–Next Generation (FPDS-NG) federal procurement database. This reflects two sets of issues that have plagued federal and defense contracting for years.

The first issue relates to federal acquisition rules that start from good intentions but do not end up being fully enforced, in their spirit or letter. The US government has failed to meet its self-imposed goals on SDVOSB since they were put in place almost a decade ago, not to speak of the 1953 Small Business Act. The American Small Business League was noting very recently how large businesses keep being awarded set-asides they are not eligible for. One way to do just that often in use in the defense space is by contracting Alaska Native Corporations (ANCs). Overall, the FY12 report by the Small Business Administration IG shows some of amount of progress by bureaucratic standards that do not necessarily translate into “well now we actually stick to the rules we set for ourselves.”

The second issue is one of transparency and accountability. The federal government has piled up several databases over time to keep track of requests for proposals, contract actions, contractors et. al. To this the Department of Defense and the services have added their layers of poorly integrated software to track program costs, performance, and other overlapping data. Despite occasional claims to the contrary, these tools remain a morass of confusing, often poor data. It is not rare to find contract actions worth dozens of millions of dollars in FPDS-NG that have a missing or garbled description, if they have a description at all. Whether set-aside status is properly documented in FPDS is unfortunately not that database’s most pressing data quality issue.

In recent years the Obama administration has made compelling claims of transparency and did overhaul some of the websites that relay federal spending information to the public. However, behind the web 2.0 veneer of USAspending,org are the same old data sources. This gives the unsuspecting user the ability to easily generate nice maps and charts that can be quite misleading if not outright false. Development of FPDS-NG has stalled to version 1.4 about two years ago, while GAO’s funding of a consolidation effort known as the System for Award Management (SAM) seemed to have faced difficulties in recent months, despite a $74M award to IBM to consolidate federal acquisition databases (8 or 9 of them, it is hard to keep up without a database of databases). SAM’s rollout plan has already been delayed and it will take years before it reaches completion.

In the meantime, the same old endemic issues will keep resurfacing until fundamental changes are made. In short, while waiting for GAO’s SAM, DID tells DOD IG: GIGO.