MAZIE K. HIRONO

2^ND^ DISTRICT, HAWAI\`I

\-\-\-\--

MEMBER OF CONGRESS

**Congress of the United States**

**House of Representatives**

**Washington, DC 20515**

**Statement of Congresswoman Mazie K. Hirono of Hawaii**

**in the U.S. House of Representatives**

**In Support of H.R. 1362**

**Accountability in Contracting Act**

**March 15, 2007**

Ms. HIRONO. Mr. Chairman, as a cosponsor of H.R. 400, introduced by my
colleague from Hawaii, the Honorable **NEIL ABERCROMBIE,** which seeks
to prohibit war profiteering, I support H.R. 1362 which champions the
same goals.

   At a time of war, when the lives of Americans are put at risk, when
the limited resources of the Nation are being expended and when programs
serving millions of Americans are being cut back, no corporation or
person should ever be allowed to misuse, waste or misappropriate Federal
tax dollars. Unfortunately, due to mismanagement, incompetence and
sweetheart deals, and lack of oversight, certain U.S. corporations and
their subsidiaries apparently have blatantly over-charged government
agencies, engaged in wasteful practices and committed allegedly
fraudulent acts that have resulted in the virtual disappearance of
billions of dollars.

   Examples of American corporations padding expenses then charging an
administrative fee on top of the overpriced goods and services have been
well-documented. Documentaries such as \`\`Iraq for Sale\'\' chronicle a
chilling story of unchecked waste, demoralization of our troops from
shoddy services provided by contractors and shameless acts of corporate
misconduct.

   It is shocking that, in some cases, it\'s all legal. Without
reasonable restrictions on contractor spending and practices on no-bid
and cost-plus contracts and lack of enforcement of existing law, there
is no incentive to provide goods and services to the government at the
least cost and with the greatest efficiency. Indeed, the current
practices foster and encourage waste and corruption, as the dismal track
record in Iraq of defense contractors demonstrate. Just one corporation,
Halliburton, has disputed charges amounting to over a billion dollars.

   This bill minimizes the use of no-bid contracts, promote the use of
cost effective fixed-price contracts and limit the duration of no-bid
contracts, which must be awarded under emergency conditions, to one
year. This bill allows the awarding of no-bid contracts which cannot be
delayed but require re-bidding when the emergency has elapsed. Public
disclosure of the reasons for using no-bid contracts and overcharging
will promote transparency and expose improper contracting practices.
Fixed price, rather than open-ended cost-plus, contracts will encourage
efficiency and minimize unrestricted spending by contractors.

   H.R. 1362 will go a long way to curb unchecked abuse and
overcharging, slipshod accounting practices and lack of accountability.
It will give government procurement managers the authority to control
wasteful and fraudulent contractor practices, as well as be governed by
stricter ethical guidelines to regulate the procurement managers\' own
behavior.

   Until now, there has been no effective congressional oversight since
the war began and no effective laws to rein in wasteful, corrupt and, in
fact, unpatriotic behavior. Billions have been lost in this war, while
critical programs in education, health, environment, alternate energy
and other domestic needs have been unnecessarily slashed.

   This legislation will help correct this unacceptable situation. I
commend Chairman **WAXMAN** and the Committee on Oversight and
Government Reform for this important improvement in our Federal
contracting laws.