Cantwell Grills Commerce Secretary Locke for Moving Forward with MOC-P Acquisition Despite Inspector General Warning

Cantwell says ongoing construction in Newport, OR, is a 'waste of taxpayer dollars' by an agency that hasn't done its homework; raises possibility that Congress could halt funding

WASHINGTON, DC – Today, U.S. Senator Maria Cantwell (D-WA) told Commerce Secretary Gary Locke that constructing a new home port in Oregon for oceanic research vessels wastes taxpayer dollars and ignores an Inspector General’s (IG) warning that the government failed to consider cheaper, government-owned alternatives. If the project goes ahead in the face of official warnings contained in an IG
letter about faulty procedure, Cantwell said the next step would be for Congress to consider halting funding.
At issue in today’s Senate Finance Committee hearing was construction under way in Newport, OR, of a Marine Operations Center – Pacific (MOC-P) pier to serve as home port for National Oceanic and Atmospheric Administration (NOAA) research vessels. The Department of Commerce IG is investigating the NOAA leasing decision at the request of Cantwell, who chairs the Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee, and Senator Olympia Snowe of Maine, the subcommittee’s ranking Republican. The IG found that NOAA, as required by law, should have considered using available federal government-owned sites in Seattle before leasing property in Oregon. During today’s hearing, Cantwell pressed Locke on problems with the process as reported in a May 26, 2010 letterby CommerceInspector General Todd Zinser to NOAA Administrator Jane Lubchenco. Zinser wrote that “before it finalizes its examination” of home port sites, “NOAA should examine whether it sufficiently complied with the requirement to consider existing federal facilities before pursuing a new lease acquisition.” Cantwell said today that NOAA clearly ignored the IG’s warning, and moved forward anyway in finalizing its ‘practicable alternatives’ report. Construction work continues today at the Port of Newport, where groundbreaking ceremonies were held on June 3rd.
Locke admitted he found the underlying findings in the IG report troubling and that the lease decisionmaking process in the MOC-P case does not give him confidence in NOAA’s acquisitions procurement processes overall. But Locke gave no indication that he supports any change in the selection of Newport as the home port for the NOAA research fleet, saying later in the hearing that he regarded the decision as “final with respect to the Department of Commerce.”
On March 3rd, Cantwell and Snowe called on the Department of Commerce Inspector General to audit the process used to determine the home port of MOC-P saying the process raised ‘serious concerns’, including the lack of any business case analysis; the avoidance of oversight by appropriate review boards; NOAA’s exemption of MOC-P from its facility acquisition policies and procedures; the failure to formally evaluate the potential use of existing federal properties to ensure the wise use of taxpayer dollars; and the lack of a termination clause in the lease. The IG is now the second independent oversight body to raise serious concerns about the acquisition. On December 2, 2009, the Government Accountability Office (GAO) sustained a protest by the Port of Bellingham against NOAA’s lease award and recommended that NOAA conduct an analysis of practicable alternatives to the Newport offer.
The IG report on the MOC-P acquisition is expected to be released next week.
Cantwell: Secretary Locke, I want to ask you about a separate issue which is why an Inspector General recommendation said that NOAA should withhold its finalization of practicable alternatives on their Marine Operations Center, but NOAA went ahead with that process. Do you think that your agency’s acquisitions process is above reproach?
Locke: No. Our acquisition processes within NOAA and throughout other agencies of Department of Commerce need a thorough review, and that’s why we’ve ask for a separate outside review of acquisition experts from other federal agencies and the private sector to come in. We’re very concerned about the fact that we have a defect and consistency in the evaluation of, for instance, the new home porting of NOAA ships in the Pacific Northwest. Although the Inspector General indicated that the defects were not sufficient to overturn that and still that the award should have gone to the ultimate site, which was Newport, but nonetheless, the underlying findings are very troubling and do not give me confidence, or I think the confidence that the American public expect on any type of acquisition procurement process. We’ve seen that with the census bureau years ago with respect to billions of dollars spent on handheld computers that did not work, where we paid the money and got nothing for it. We’ve seen it with the NOAA satellite procurement that was in collaboration with the Defense Department and NASA.
Cantwell: With all due respect, Mr. Secretary, I have no information from the Inspector General that says that you should go ahead and that it’s the lowest cost site. So we’ve asked the Inspector General if that is the case and they’ve said “no.” So where are you getting that information?
Locke: I read a report from the Inspector General just last week, prior to my phone call to you, indicating the problems that the Inspector General’s office uncovered, but his conclusion that these defects would not have changed the fact that the ultimate awardee was still the lowest cost and nothing to reverse that contract, but I’m happy to discuss that with you.
Cantwell: I would love to see that document that says so. I think when my staff called after our phone call, I think the response was the Inspector General’s office laughed that that was the answer that NOAA was given. And this document that I’m reading from, May 26th, it basically says NOAA should examine whether it sufficiently complied with the requirement to consider existing federal facilities before pursuing a new lease acquisition. So we’re talking millions of dollars here to the U.S. taxpayer by the fact that this facility did not go through a process in which existing federal facilities were considered. The Inspector General said go back and do that homework and you guys said let’s just go ahead. So I don’t think the Inspector General has given you a blanket go-ahead authority. If you have such a document, I’d love to see it.
Locke: Let me just indicate that I also agree with you that it would have been preferable for us to consider outside existing federal facilities, instead of trying to lease from either a separate governmental agency whether state, local or private sector. I think in looking at all of this, it would have been preferable. And I think that’s why we need to have a thorough review of the acquisition processes within the Department of Commerce and especially NOAA in terms of are we asking for Cadillac versions of things, when in fact, we should be looking at more readily available, suitable facilities, products, and services before we procure.
Cantwell: Well, I don’t think the Inspector General has said for you to go ahead. I have a letter here from them saying that you shouldn’t go ahead. So when the Inspector General says an agency shouldn’t be taking action and are costing taxpayers money because they haven’t done a thorough review, the next step is usually Congress gets involved in saying you shouldn’t allocate money to such projects. So we’ll look forward to discussing this with you further.
Locke: I understand.
High quality audio and video available upon request of Cantwell’s exchange with Locke today.