Cheatle was berated for hours by Republicans and Democrats, repeatedly angering lawmakers by evading questions about the investigation during the first hearing over the July 13 assassination attempt. Cheatle called the attempt on Trump’s life the Secret Service’s “most significant operational failure” in decades, and vowed to “move heaven and earth” to get to the bottom of what went wrong and make sure there’s no repeat of it.

“The Secret Service’s solemn mission is to protect our nation’s leaders. On July 13th, we failed,” she told lawmakers on the House Oversight and Accountability Committee.

Cheatle acknowledged that the Secret Service was told about a suspicious person two to five times before the shooting at the Butler, Pennsylvania, rally. She also revealed that the roof from which Thomas Matthew Crooks opened fire had been identified as a potential vulnerability days before the rally. Cheatle said she apologized to Trump in a phone call after the assassination attempt.

Yet Cheatle remained defiant that she was the “right person” to lead the Secret Service, even as she said she takes full responsibility the security lapses. When Republican Rep. Nancy Mace suggested Cheatle begin drafting her resignation letter from the hearing room, Cheatle responded, “No, thank you.”

In a rare moment of unity for the often divided committee, the Republican chairman, Rep. James Comer, and its top Democrat, Rep. Jamie Raskin, issued a letter calling on Cheatle to step down.

The White House didn’t immediately comment on whether President Joe Biden still has confidence in Cheatle after her testimony.

Democrats and Republicans were united in their exasperation as Cheatle said she didn’t know or couldn’t answer numerous questions more than a week after the shooting that left one spectator dead. At one point, Mace used profanity as she accused Cheatle of lying and dodging questions, prompting calls for lawmakers to show “decorum.”

Lawmakers pressed Cheatle on how the gunman could get so close to the Republican presidential nominee when he was supposed to be carefully guarded, and why Trump was allowed to take the stage after local law enforcement had identified Crooks as suspicious.

“It has been 10 days since an assassination attempt on a former president of the United States. Regardless of party, there need to be answers,” said Rep. Alexandria Ocasio-Cortez, D-New York.

Cheatle acknowledged that Crooks had been seen by local law enforcement before the shooting with a rangefinder, a small device resembling binoculars that hunters use to measure distance from a target. She said the Secret Service would never have taken Trump onto the stage if it had known there was an “actual threat.” Local law enforcement took a photo of Crooks and shared it after seeing him acting suspiciously, but he wasn’t deemed to be a “threat” until seconds before he opened fire, she said.

“An individual with a backpack is not a threat,” Cheatle said. “An individual with a rangefinder is not a threat.”

Cheatle said local enforcement officers were inside the building from which Crooks fired. But when asked why there were no agents on the roof or if the Secret Service used drones to monitor the area, Cheatle said she is still waiting for the investigation to play out, prompting groans and outbursts from members on the committee.

“Director Cheatle, because Donald Trump is alive, and thank God he is, you look incompetent,” said Rep. Mike Turner, R-Ohio. “If he were killed, you would look culpable.”

Rep. Ro Khanna, one of the Democrats who joined the calls for Cheatle to resign, noted that the Secret Service director who presided over the agency when there was an attempted assassination of former Republican President Ronald Reagan later stepped down.

“The one thing we have to have in this country are agencies that transcend politics and have the confidence of independents, Democrats, Republicans, progressives and conservatives,” Khanna said, adding that the Secret Service was no longer one of those agencies.

Trump was wounded in the ear, a former Pennsylvania fire chief was killed and two other attendees were injured when Crooks opened fire with an AR-style rifle shortly after Trump began speaking.

Cheatle said the agency hopes to have its internal investigation completed in 60 days. Homeland Security Secretary Alejandro Mayorkas has separately appointed a bipartisan, independent panel to review the assassination attempt, while the department’s inspector general has opened three investigations.

Meanwhile, a bipartisan delegation of about a dozen members of the House Committee on Homeland Security toured the shooting site Monday. The lawmakers said they were the first group outside law enforcement to climb onto the roof where the shooter positioned himself.

Authorities have been hunting for clues into what motivated Crooks but have not found any ideological bent that could help explain his actions. Investigators who searched his phone found photos of Trump, Biden and other senior government officials and found that he had looked up the dates for the Democratic National Conventional as well as Trump’s appearances. He also searched for information about major depressive order.

The attack on Trump was the most serious attempt to assassinate a president or presidential candidate since Reagan was shot in 1981. It was the latest in a series of security lapses by the agency that has drawn investigations and public scrutiny over the years.

Cheatle took over two years ago as head of the Secret Service’s 7,800 special agents, uniformed officers and other staffers whose main purpose is protecting presidents, vice presidents, their families, former presidents and others. In announcing her appointment, Biden said Cheatle had served on his vice presidential detail and called her a “distinguished law enforcement professional with exceptional leadership skills” who had his “complete trust.”

Cheatle took the reins from James M. Murray as multiple congressional committees and an internal watchdog investigated missing text messages from when Trump supporters stormed the U.S. Capitol on Jan. 6, 2021. The Secret Service says they were purged during a technology transition.

___

Lauer reported from Philadelphia. Associated Press reporters Michael Kunzelman and Zeke Miller in Washington contributed.

___

Follow the AP’s coverage of the U.S. Secret Service at https://apnews.com/hub/us-secret-service.

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This isn’t the first time the federal government has focused its attention on this ongoing challenge.

Following the cyberattack on the Municipal Water Authority of Aliquippa, Pennsylvania, the federal government has renewed its focus on ensuring the security of the water and wastewater (WWS) sector of the country’s critical infrastructure, and recently issued a warning to water system operators regarding an uptick in attacks against those systems by pro-Russia hacktivists. The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency released new guidance on the actions that WWS entities should take to improve the resilience of their networks to cyberattacks as well as an incident response guide for the sector. Further proving the government’s renewed focus, in February 2024, the White House also issued an executive order to bolster the maritime sector further and upgrade security requirements for the nation’s ports.

Recent studies show that the vulnerabilities that permitted the Aliquippa attack are far from unique. In fact, Censys identified vulnerable and exposed Unitronics programmable logic controllers (the type of devices targeted in the Aliquippa attack) associated with water, wastewater and energy systems in the U.S. and found a total of 149 internet-exposed devices and services.

Unfortunately, there is a plethora of these vulnerable systems nationally, with the entire infrastructure lacking security controls. More often than not, the operators of these systems are focused on operational technology (OT) and lack the necessary cybersecurity skills to address the challenges that today’s bad actors present. Although the federal government offers limited oversight and grants to help, water authority organizations reside in municipal governments where funding for cybersecurity resources can be a major issue.

CISA’s recent guidance presents a significant step in the right direction, with common-sense recommendations that can help water authorities protect themselves. And while many of the recommendations might sound relatively simple, they address extremely complex problems that will be difficult to surmount.

For example, take the first recommendation in the CISA guidance: Reduce exposure to the public-facing internet.

CISA rightfully notes that the controllers and remote terminal units deployed in waterworks make easy targets when connected to the internet. It may sound like an easy fix to remove such devices from internet access, but the vulnerability may be due to compromised external systems that are connected to the water authority. For example, these systems may be associated with water towers or even gas stations and car washes that interact with the water authority via the internet. Consequently, all these connections must be managed and monitored – an extremely complex and arduous task.

Adding to the difficulty of this endeavor, municipal water authorities often lack the resources and staff to enact the recommendations in the EPA’s alert. Many are underfunded and have not traditionally prioritized cybersecurity as a critical aspect of their mission.

Consequently, we need a “whole of government” approach in which a federal agency like CISA can play an essential role. CISA and the Environmental Protection Agency – the agency designated by the White House to ensure that the water sector is prepared for any hazard, including cyber risks – are well positioned to lead a systematic process to support critical infrastructure organizations and operators that don’t have the funding, technical skill sets or acumen and guide them down the path as a partner to help solve these problems. Such an approach should begin with a few basic steps on the part of the federal government and water authorities:

• Conduct an internal asset inventory. CISA and EPA can help leaders at municipal water authorities determine what systems, devices and data exist in their environment, both internally and externally. However, this should extend beyond a simple inventory. It must also include an understanding of the criticality of each of those systems relative to the organization’s ability to achieve its mission. The EPA’s Water Sector Cybersecurity Technical Assistance Provider Program trains state and regional water sector technical assistance providers who can assist with this assessment. The EPA also offers a Cybersecurity Incident Action Checklist specifically geared to helping water utilities prepare for, respond to and recover from cyberattacks.
• Identify and monitor assets external to the organization’s domains. This includes looking at supply chains to understand potential vulnerabilities related to business partners, a step almost as important as understanding the inventory of the organization’s own assets. Most organizations have a good understanding of their internal assets but often don’t have a good handle on risks associated with external assets that the organization reacts with – which is how adversaries usually get into the environment. An unclear understanding of those external assets – especially internet-connected IT and OT systems – makes it extremely easy for the bad guys.
• Continue to provide funding and grants to municipalities working to address critical infrastructure security issues. Congress and DHS should continue to provide funding that will help these organizations train their IT and OT workforce in cybersecurity, hire people with the skill sets they need and generally help these organizations to modernize their infrastructure. This funding should be contingent on supporting policies that will help facilitate training, modernization and closing the pay and skills gaps within municipalities that are specific to the water and wastewater issue.

On the other side of the equation, water systems operators should not hesitate to request help. CISA and EPA offer assistance to organizations upon request, so operators should take the initiative to proactively contact the EPA or their organization’s regional cybersecurity advisor at CISA.

There have been recent signs of progress. Reps. Rick Crawford (R-Ark.) and John Duarte (R-Calif.) are promoting a bill to create a government office to develop cybersecurity rules for water systems, with the EPA acting as an enforcer, as they already are the sector risk management agency. Also, EPA and White House officials in March asked a group of governors to develop plans for dealing with major cybersecurity risks facing their state’s water and wastewater systems, according to a report from The Wall Street Journal.

Finally, we need to view addressing this issue as a marathon, not a sprint, to beat the hackers. Our adversaries are continuously looking to poke holes in our defense, and it is mandatory that we do the same in order to keep them out – now and in the future. We must not lose sight of the stakes involved; our country’s national security may depend on it.

Todd Helfrich is the vice president of federal for Censys.

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It’s been a major policy initiative of the Biden administration to get more Americans and agencies utilizing electric vehicles. Well, how about the agency that probably has the largest number of vehicles in its garage? The Postal Service is in the process of electrifying its fleet. To do that though, there needs to be the infrastructure to support them once they do get out there. To get an update on where things currently stand, Federal News Network Executive producer Eric White spoke to Amanda Stafford, Deputy Assistant Inspector General for the USPS’ IG office, on the Federal Drive with Tom Temin.  

Interview Transcript: 

Eric White  Absolutely. So, let’s just start with the goals here that USPS set for itself. What is it exactly trying to do? I imagine electrifying the whole fleet would be ideal, but that’s going to be a huge undertaking. What’s the timeline that they gave you?

Amanda Stafford  Well, as part of the delivering for America 10-year plan, the Postal Service plans to transform and modernize their network to improve sustainability, with a goal of not only driving revenue growth, but also reducing its greenhouse gas emissions by 40%. In some key areas by 2030. So, a part of achieving this goal includes replacing a large portion of its delivery fleet of approximately 225,000 vehicles with the purchase and deployment of over 66,000 electric ones. And this Fleet Modernization plan, bases investment is approaching 9.6 billion. So, I think their goal is go through 2030. But they’re trying to move things along quickly.

Eric White  All right. And so that’s a pretty massive undertaking, what is required as part of the infrastructure needed to support electric vehicles, you got to have places to charge them and got to make sure that have the proper repair units in place to actually maintain the fleet. What has the Postal Service been able to accomplish so far?

Amanda Stafford  Well, in terms of achievement, some of our previous work has noted the successes they’ve had related to the acquisition of charging station infrastructure. We also had a report related to the vehicle maintenance facilities and their preparedness for this effort. Our most recent engagement highlighted that the Postal Service expects to complete the charging station related to construction and deployment at 130 sites by the end of 2024. But as of March 26, the Postal Service confirmed that completed six sites. And by mid-June that just passed, construction was underway at 50 locations, A-2 had also related construction schedule. So, they’re moving things along kind of first, all those planning processes doing the acquisition, and then to your point, kind of making sure they have that charging station infrastructure in place. So that’s all that’s needed prior to rolling out those vehicles.

Eric White  As with any major government project, there’s going to be speed bumps along the way pun intended, what sort of delays and challenges has the agency withstood to try and get this thing off the ground?

Amanda Stafford  Well, we acknowledge that the Postal Service’s electrification efforts are unprecedented their progress is truly significant. We did find that the first 29 sites that were slated for deployment of the charging station equipment were delayed by an average of 219 days compared to its original schedule. So, it’s a huge undertaking, but they’ve had, as you said, a few bumps in the road to get started.

Eric White  And what were the reasons behind those delays? Was it just a personnel issue or were costs problems coming into play because this is probably a lot of moving parts, including a lot of moving dollars.

Amanda Stafford  Right. And the charging station construction delays, the Postal Service noted several challenges such as weather site specific conditions like sinkholes, utility specific regulations, and coordination. And while we recognize that a lot of those conditions truly were outside of its control, we found that the Postal Service did not establish realistic completion dates that should have factored in many of these foreseeable issues while planning schedule. So, for example, the construction in the Terre Haute SMDC, which is one of the facilities it’s located in Indiana, was originally supposed to be completed on December 28. Well construction was delayed due to foreseeable weather conditions, that area has predicted temperatures of 28 degrees or lower by the end of October, which makes construction difficult and paving the parking lots where the charging stations are basically impossible. So really in addition, the Postal Service did not really follow schedule management best practices entirely. They really to establish an informed baseline that reflected these conditions and constraints. And really, their schedule was driven by you know, an extremely aggressive business objectives. And then lastly, they didn’t use an overarching project management system that tracked real time updates and the cause of delays. They acknowledged though, that they need to replace that you know, spreadsheet that they were using in the process of not only acquiring but deploying a project management system.

Eric White  We’re speaking with Amanda Stafford, she’s Deputy Assistant Inspector General with the US Postal Service IG o Office. And so, what can be done to help them better prepare and execute these vehicle deployment plans, I know you laid out some of the problems that they had as far as planning goes. But you know, when they do incur these delays, what can be done to help speed things up a little bit.

Amanda Stafford  To set up the vehicle deployment plans for success, it really is essential to get all that related charging infrastructure in place. So, we had a few recommendations coming out of that specific audit, one to really support the Postal Service preparedness, we recommend that they use best practices to inform a baseline schedule for the future sites. So yes, we’re learning as we go. But as we go forward, can we take those best practices forward. Two, replace their spreadsheet with a project management system, which has dynamic updates and centralizes, all that information and as analytics, and as I mentioned, they’re in the process of addressing that already. And then lastly, to adopt these best practices, we recommended that the Postal Service could explore obtaining outside consultative support, that money could be well spent and fake to help them quickly. Evaluate lessons learned and, and pivot. So as early delays could really jeopardize the ability to use the vehicles which you know, and really achieve these aggressive, aggressive business objectives. So that was our last recommendation in that space.

Eric White  Yeah, and I guess the one ray of hope here, I mean, it’s not too dreary. But a hopeful observation would be that these are all very fixable problems. I mean, we’ve interviewed you all before. And there have been, you know, insurmountable issues of, you know, like you said, cost overruns, and things like that. But it seems as if it’s just more organization is needed.

Amanda Stafford  Yeah, I don’t think these are insurmountable. Just as you said, the Postal Service is resilient. And I think they can pivot, you know, they were very open and receptive to our recommendations and discussion. And they, you know, during the course of the audit, recognize that they had opportunity. So, I agree with you, I think that this is, it’s a bump in the road, and the deployment is ongoing. And so now they can, they’re in the place to quickly pivot.

Eric White  And the Postal Service also has a sort of different approach to this with these incentive programs to actually get this thing moving. How effective has that been? And are people actually utilizing it?  Great question. So, for the utility incentive program participation, and in our audit, we identified 13 programs that were currently available, and seven programs that have since expired, and these programs can really allow the Postal Service to save money along the way by partnering with different entities. So, we found that they could potentially have achieved cost savings, around 8 million approximately, for the first 29 sites. Management have previously done some analysis and reviews around the incentive space, but at the time, has decided not to pursue the incentive programs, but rather focus on the implementation of the certain delivery centers. So really, the network modernization to prepare to drive revenue strategies, which is obviously a huge facet of their 10-year plan. You know, we cited some opportunities, I think the Postal Service is going to revisit this space. And I think, you know, we do see that there could be a chance to drive cost savings, which is always an important thing to do. And especially important for the Postal Service itself. Do you foresee that they are happy with this structure that they have set up and are actually seeing positive results from it, they just need a little bit better job executing it would be the way to simple way of simplifying it.

Amanda Stafford  I would say that the Postal Service at this juncture and you know, that during the beginning of the audit, and through the course, did not was playing not to pursue this Avenue at that time. There are limitations, which we cited in our report that, you know, there could be required to subcontractors by the program owner, there could be easements and other terms and conditions. But we really asserted that, you know, the continued evaluation could bear fruit, as the postal service may be able to negotiate eligibility terms with program administrators and take advantage of these opportunities. For example, the Postal Service Management say they were not eligible to participate in some of the programs, one that comes to mind, we directly communicated with that representative from the program. And they said, well, actually federal fleet such as the Postal Service, are eligible to register and participate. So, I think it requires a lot of digging additional work. So, we had some recommendations in that space that that they’re pursuing and looking at now based on what we’ve described. So, I think that this could be a facet of their plan, but they’re also balancing that with the need to go very quickly. And there are other priorities related to the 10-year plan. So, we understand kind of the balance that they’re trying to continue to have.

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In a 6-3 ruling last month in the case Loper Bright Enterprises v. Raimondo, the Supreme Court eliminated Chevron deference — a legal precedent since 1984 that required judges to defer to an agency’s interpretation of relevant laws when its regulations are challenged in court.

Legal experts are still puzzling out what will change for regulatory agencies following the court’s decision.  But Republican lawmakers aren’t wasting any time planning out subsequent steps to roll back the administrative state.

Sen. Eric Schmitt (R-Mo.) is leading colleagues in letters to 101 agencies that have published more than 50 rules since 2000. The lawmakers are “demanding answers on how current regulatory processes will be handled following the Loper Bright decision.”

Republican senators are also backing the Separation of Powers Restoration Act, a House-passed bill that would codify an end to Chevron deference.

The senators have also launched a working group meant to explore other ways to challenge the administrative state.

Schmitt said these efforts are meant to “retake legislative authority away from administrative agencies and place it back where it belongs: the Article I branch.”

Meanwhile, the top Republicans on two House committees are looking for agency regulations that might be challenged following the court’s ruling.

House Transportation and Infrastructure Committee Chairman Sam Graves (R-Mo.) joined House Oversight and Accountability Committee Chairman James Comer (R-Ky.) in asking the Environmental Protection Agency, and the departments of Transportation and Homeland Security about regulations or regulatory decisions made under the Biden administration.

The chairmen say some of these agency rules are based on interpretations of the law that could be challenged following the Supreme Court’s ruling.

“The Biden Administration has promulgated far more major rules, imposing far more costs and paperwork burdens, than either of its recent predecessor administrations,” Comer and Graves wrote.

Despite lawmakers’ renewed interest in the topic, policy experts and former lawmakers say Congress currently lacks the necessary bandwidth to take back some of the regulatory authority they ceded to the executive branch over the years.

Former Sen. Toomey (R-Pa.) said lawmakers, following the Supreme Court’s ruling, may renew efforts to pass the REINS Act.

The bill, which passed the House in May 2023, would require Congress to vote on major agency regulations before they go into effect.

“At a minimum, you ought to have this rulemaking require the affirmative action of Congress. And then the American people can hold Congress accountable if it doesn’t like the rule. It can take that out on its member of Congress, as well it should. But what do you do when the EPA overreaches the Clean Water Act, or when the SEC decides it’s going to prevent a whole new technology like blockchain from even being able to take hold. And the list goes on and on,” Toomey said Tuesday.

Toomey, speaking at a “Life After Chevron” event hosted by the American Enterprise Institute and the Brookings Institution, said some agencies — including the Federal Trade Commission, Consumer Financial Protection Bureau and Securities and Exchange Commission — are taking on regulatory and enforcement activities that stray from what they’re authorized to do under the law.

“We have agencies whose leaders have decided they’ve got an agenda that they’re pursuing. They’re not there to impartially implement the laws that pertain to their jurisdiction. Rather, they’re there to implement a particular agenda. They hire very capable, very creative attorneys to go out and justify somehow what it is that they want to do,” Toomey said. “They discover some power that no one previously had discovered in authorizing legislation, and they say, ‘There you go, that’s what authorizes me.’”

But beyond reintroducing the legislation in the next session of Congress, following this year’s elections, Toomey said Congress likely doesn’t have the capacity to take on a greater role in the rulemaking process.

“Congress has other bigger problems,” he said. “I wouldn’t expect a big change in behavior in Congress. I don’t think the agencies will start to change their behavior. I think they’ll be a little less ambitious in this regard.”

AEI Senior Fellow Philip Wallach said lawmakers went on a “letter-writing blitz” following the Supreme Court ruling, with the goal of challenging agency regulations.

“Basically, the approach is to send out a letter and say, ‘Hey, now that Chevron is gone, you’d better go back and look at what you did and fix it, because we know that you were getting away with murder before, and now you’ve got to go back and clean up your act.’ Well, the spirit of that is wrong,” Wallach said.

“The thing we need most is for Congress to realize that it’s on them to shoulder their constitutional prerogatives,” he added. “There’s such a tendency for legislators, when they want something done, to write a letter to the executive branch and say, ‘I’m a congressman, listen to me. Do this with your executive branch authority. And even this, where we say you’ve been abusing your executive branch authority, the reaction is, ‘You go fix it, executive branch.’ Congress has to take it upon itself to fix it. You can’t just say, ‘Well I think you’re using the Clean Air Act wrong, let me shake my fist some more about it. Well, go ahead and rewrite the act, and be more specific about what you wanted.”

AEI Senior Fellow Kevin Kosar said the REINS Act could give lawmakers a greater say in the federal rulemaking process.

“It’s a way to force legislators out of this unhealthy dynamic,” Kosar said. “What they frequently do is they let the executive branch make policy decisions and then, if they like them, they cheer. If they don’t like them, they hoot at them until you get somebody new in the White House who decides to switch regulations on certain topics like immigration, for example. And again, there’s cheers from some, hoots from others. Inevitably, there’s a court case. That’s what happens when legislative power seeps away from the legislative branch. You seldom get a healthy resolution of a tough issue.”

However, Kosar said the REINS Act also creates the possibility that lawmakers don’t put pending rules to a vote — stalling them from going into effect.

“If they don’t put it on the calendar, does nothing happen? I think the answer is, yeah, nothing happens. So where does that leave the agency? Well, it’s in a weird limbo, where presumably, it’s going to go back and create a new regulation, which could be substantially similar. Or they could try to break it up into pieces and therefore get it under the limit and work it through,” he said.

Wallach and Kosar co-wrote a 2016 article proposing the creation of a Congressional Regulation Office, which would give the legislative branch the capacity to analyze agency rulemaking the same way the Congressional Budget Office reviews the federal government’s finances.

Absent that kind of legislative branch agency, however, Kosar said Congress doesn’t have the time to analyze the thousands of rules agencies propose every year.

“Regulation is a very tough thing, and if Congress is going to move it into its workflow, well guess what? Congress’ workflow right now is already kind of spilling over,” Kosar said. “If you’re going to lean in on regulation, you’re going to need help, because you can’t just pick this up and spitball it. It takes a lot of education, thinking, and expertise — and there’s just not enough of it on Capitol Hill. And as any congressional staffer will tell you, they don’t need anything more added to their work plate — they are plenty busy.”

Wallach added that the Supreme Court’s ruling — and the chief justice’s opinion — make it clear that agencies’ subject-matter expertise still matters when it comes to agency rulemaking.

“Expertise is not one thing. Agencies do have subject-matter domain expertise. The EPA has tons of experts on toxicity and all other sorts of aspects of environmental and health sciences. Agencies also have policy expertise and practical administrative expertise. But when you’re considering ambiguous statutes, you also need to think about legal expertise,” he said.

Roberts, in the court’s majority opinion, wrote that by overruling Chevron’s deference, “the Court does not call into question prior cases that relied on the Chevron framework.”

Rachel Augustine Potter, an associate professor of politics at the University of Virginia, said the court’s Chevron ruling and the Trump administration’s promise to bring back Schedule F — making it easier to fire federal employees in policymaking positions — indicates a multi-pronged attack on agency expertise.

However, she doubts Congress is willing to devote more time and resources to play a more active role in agency rulemaking.

“There’s not a lot of confidence that Congress is going to take up the mantle on legislative capacity front and take up the project of more detailed statues. Instead, what we heard about is about different bills that have been introduced that would constrain agency authority,” Potter said.

Potter said agencies might decide to staff up on lawyers, and that policymaking federal employees might leave their agencies.

“We might also see more exits from agencies, as career civil servants look at this landscape and say, ‘Wow I thought I was coming into this institution, which for a long time has looked a certain way and might be really different going forward. My expertise … might not be the same as what I thought it was when I took this job.’ There’s a lot of different implications, and I think we’re going to spend the next couple of months and years figuring out what agencies actually do.”

The post GOP lawmakers see post-Chevron opportunity to ‘retake’ power from regulatory agencies. Experts doubt it’ll work first appeared on Federal News Network.

Predictable calls have emerged for Cheatle to resign. The true course of action isn’t so obvious, though. I mean “true” in the sense of manifest or straight. She took ultimate responsibility in a TV interview, but then the Secret Service sort of bumbled the PR by seeming to blame the local police on hand at the Trump rally. After this came a string of revelations about how the shooter was in plain sight, was found to have a rangefinder, generally aroused suspicion, and yet somehow to hide himself until too late.

If Cheatle should step down — and she probably will have to — I’d say her departure would come under the “that’s the way it is” category. It won’t come because she’s a terrible person or acted nefariously. She didn’t personally commit the planning and protective lapses, so far as we know. Nor was she caught stealing or harassing employees or such. By all accounts I’ve read, Cheatle is an earnest law enforcement person with long personal experience in presidential protection.

The Secret Service itself has had issues. The object of more or less continual critique, it ranks 413 out of 459 component agencies in the Best Places to Work in the Federal Government for 2023. It’s experienced its share of scandals over the years, but not since Cheatle returned as director. The agency has many functions, but its most visible — official protection — is also the most difficult and carries the highest stakes.

This situation is more like a Navy ship commander who runs aground while under the guidance of a harbor pilot. Grounding a warship often, but not axiomatically, means the skipper takes the fall. Officers know and accept that when they move up to O-5 grade.

I checked in with retired Navy Captain Bill Toti, who built a successful post-naval career as a consultant and author. He told me, in a ship accident “the default is that the CO will be sacked.” He added that the Navy conducts investigations to see if a chart was wrong, whether the crew took prudent precautions, or whether something made the situation beyond control.

“Normally these extenuating circumstances don’t exist,” Toti wrote in an email exchange, ” and it’s quickly determined to be crew error. In those cases, the CO will always be relieved for cause, because it was his/her responsibility to ensure the crew [is] properly trained and procedures properly followed.”

That’s the case here with the Secret Service. Only this case amounts to more than the equivalent of running aground. A grazing of Trump and the murder of a bystander equate to a near shipwreck. The incident evokes unpleasant national memories.

Yet we’ve seen, in the corporate world no less than in the federal, instances wherein terrible mistakes did not result in ouster or resignation of a top official. Boeing CEO David Calhoun came in after the previous CEO because of two crashes with many deaths. Then came the door that fell off a jet liner full of passengers. Calhoun didn’t personally leave the bolts off that plane, and company seems to face a new challenge weekly. Calhoun said months ago he’ll retire at the end of the year. At the FDIC, chairman Martin Gruenberg, overseeing a toxic work environment, said he’d leave, but only after the Senate confirms a successor. In other words, sometime after the next president is inaugurated.

I recall, it must be 40 years ago, a reporter at the Washington Post had to return a Pulitzer Prize because, if turned out, she’d fabricated the winning story. Her resume, it came out later, was mostly lies, too. The reporter resigned, but none of the editors who ignored obvious signs, resigned or were fired.

Mistakes large and small occur in every organization because we humans are frail and imperfect. Therefore, magnitude and criticality of a failure also figure into whether the boss stays or leaves. For the Secret Service, failing to prevent a sniper, plainly visible in daylight, from getting a few rounds off and actually striking a high level protectee, well that’s nearly as bad as it can get. Now the Secret Service and the politicians have to decide whether Director Cheatle is part of the solution, or not.

My earliest memory fragment is New Year’s Eve 1960. The earliest event for which I have detailed memory took place November 22nd, 1963. As a third grader, I first heard the news on the walkway leading from Churchill Elementary School in Churchill Borough, Pennsylvania. But it’s a memory of witnessed emotion and low-resolution black-and-white. To this day, the only visual documentation of the President Kennedy assassination is the short piece of 8mm film taken by the late Abraham Zapruder (whose life is another story). Both the Kodachrome film and the Bell & Howell camera ended up stored at the National Archives and Records Administration.

The JFK assassination caused a revolution at the Secret Service, which at the time was behind the times. The attempt at former President Trump’s life looks more like a lack of adherence to known best practices and a breakdown in communications, and less like some emergent, heretofore unknown phenomenon.

Nearly Useless Factoid

By Michele Sandiford

The Secret Service employs approximately 3,200 special agents, 1,300 Uniformed Division officers, and more than 2,000 other technical, professional and administrative support personnel.

Source: The Secret Service

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And even before the first hearing Republican calls for Director Kimberly Cheatle to resign intensified Wednesday with top Republican leaders from both the House and the Senate saying she should step down. The director has said she has no intention of resigning.

Rep. James Comer said initially that the Secret Service committed to her attendance but that Homeland Security officials appeared to intervene and there has been no “meaningful updates or information” shared with the committee.

Comer said the “lack of transparency and failure to cooperate” with the committee called into question Cheatle’s ability to lead the Secret Service and necessitated the subpoena.

Cheatle has said the agency understands the importance of a review ordered by Democratic President Joe Biden and would fully participate in it as well as with congressional committees looking into the shooting.

In response to the subpoena and an earlier letter from Comer, Zephranie Buetow, an assistant secretary at Homeland Security, said that while the department was “disappointed that the Committee rushed to issue a subpoena,” Cheatle welcomes the chance to testify. The official said that given Cheatle’s focus on securing the ongoing Republican National Convention, the department would appreciate if she could appear on July 25 or July 26, or the following week, instead of Monday.

The Oversight panel rejected that request for a change of date and committee spokesperson Jessica Collins said, “Director Cheatle has agreed to comply with Chairman Comer’s subpoena and the hearing will take place as scheduled.”

“Americans demand and deserve answers from the director about the attempted assassination of President Trump and the Secret Service’s egregious failures,” Collins said.

The subpoena was just one of a series of developments that occurred Wednesday in the wake of the Saturday assassination attempt.

The fact that a shooter was able to get so close to the former president while he’s supposed to be closely guarded has raised questions about what security plans the agency tasked with taking a bullet for its protectees put in place and who is ultimately responsible for allowing the 20-year-old gunman to climb a roof where he had a clear line of sight to a former president.

House Speaker Mike Johnson announced he would be setting up a task force to investigate security failures that occurred during the assassination attempt. He also said he would be calling on Cheatle to resign from her post as director of the Secret Service, saying on Fox News Channel without elaborating, “I think she’s shown what her priorities are.”

He said the task force would be made up of Republicans and Democrats and its formation would speed up the investigative process.

“We must have accountability for this. It was inexcusable,” Johnson said. “Obviously, there were security lapses. You don’t have to be a special ops expert to understand that. And we’re going to get down to the bottom of it quickly.”

Sen. Mitch McConnell, the Republican leader in the Senate, added his name to the list of lawmakers calling for Cheatle to step down. He said on the social media platform X that the near assassination was a “grave attack on American democracy.”

“The nation deserves answers and accountability,” McConnell tweeted. New leadership at the Secret Service would be an important step in that direction.”

The House Homeland Security Committee also invited several state and local law enforcement officials from Pennsylvania to testify at a hearing in the coming days with Rep. Mark Green, the committee’s chairman, saying their accounts of events were critical to the investigation.

A key issue in the unfolding aftermath of the shooting is how security responsibilities were divided between Secret Service and local law enforcement at the rally and what breakdowns occurred that eventually allowed the gunman onto the roof.

Cheatle said during an interview Monday with ABC News that the shooting should never have happened, but also said she has no plans to resign.

When asked who bears the most responsibility for the shooting happening, she said: “What I would say is the Secret Service is responsible for the protection of the former president.”

“The buck stops with me. I am the director of the Secret Service,” she said.

Anthony Guglielmi, a spokesman for the U.S. Secret Service, on Wednesday said: “Director Kimberly Cheatle is proud to work alongside the dedicated men and women of the U.S. Secret Service and has no intention to resign.”

So far, she has the support of the administration.

“I have 100% confidence in the director of the United States Secret Service. I have 100% confidence in the United States Secret Service,” Homeland Security Secretary Alejandro Mayorkas said Monday.

But in addition to the Congressional inquiries, Cheatle and the Secret Service are also facing an inquiry by the Department of Homeland Security’s inspector general.

In a brief notice posted to the inspector general’s website Tuesday, the agency said the objective of the probe is to “Evaluate the United States Secret Service’s (Secret Service) process for securing former President Trump’s July 13, 2024 campaign event.”

The agency also said Wednesday it is launching a review of the agency’s Counter Sniper Team’s “preparedness and operations.”

“Our objective is to determine the extent to which the Secret Service Counter Sniper Team is prepared for, and responds to, threats at events attended by designated protectees,” the inspector general’s office said.

Biden on Sunday said he was ordering an independent review of the security at the rally. No one has yet been named to lead that inquiry.

Since the shooting, Cheatle and the Security Service have come under intense scrutiny over how a gunman could get in position to fire at a former president.

The shooter, Thomas Matthew Crooks, was able to get within 135 meters (157 yards) of the stage where the Republican former president was speaking when he opened fire. That’s despite a threat on Trump’s life from Iran leading to additional security for the former president in the days before the Saturday rally.

A bloodied Trump was quickly escorted off the stage by Secret Service agents, and agency snipers killed the shooter. Trump said the upper part of his right ear was pierced in the shooting. One rallygoer was killed, and two others critically wounded.

Cheatle said her agency was working to understand how Saturday’s shooting happened and to make sure something like it never does again.

Cheatle and FBI Director Christopher Wray participated in a telephone briefing Wednesday afternoon with senators. Republicans came away critical.

Sen. John Barrasso, R-Wyo., tweeted on X that it was a “100% cover-your-ass briefing.” Sen. Rick Scott, R-Fla., called for administration officials to hold a daily press conference to share updates with the public, and Sen. Mike Rounds, R-S.D., said “they are so disjointed that they don’t have their own facts together yet.”

The Secret Service has roughly 7,800 staff members and is responsible for protecting presidents, vice presidents, their families, former presidents, their spouses and their minor children under the age of 16 and a few other high-level Cabinet officials such as the Homeland Security secretary.

___

AP writer Stephen Groves contributed to this report.

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House VA Committee Chairman Mike Bost (R-Ill.) says chief financial officers from the Veterans Health Administration (VHA) and the Veterans Benefits Administration (VBA) told the committee Monday that they face a $2.88 billion shortfall for the rest of this fiscal year, and a nearly $12 billion shortfall for fiscal 2025.

The VA gets funding for its mandatory health and benefits programs a year before the current fiscal year to avoid any disruption from a government shutdown.

The CFOs, Bost added, attributed the funding discrepancy to increased hiring and pharmaceutical costs.

In a letter to VA Secretary Denis McDonough, Bost said the $15 billion funding gap is the VA’s largest budget shortfall, “and a repudiation of the FY 2025 budget request that the Biden-Harris administration presented just four months ago.”

“Not only have your chief financial officers thrown out the dollar amounts requested for many key accounts, they have abandoned many of the estimates and projections that underpinned their budget. This is not just fiscal mismanagement; it is strategic whiplash,” he wrote.

VA Press Secretary Terrence Hayes confirmed the department’s projected budget deficits in a statement to reporters Thursday morning.

“VA is working closely with Congress and the Office of Management and Budget to resolve these potential shortfalls in a way that prevents any adverse impacts on veterans — and allows us to continue to deliver care and benefits to veterans at record rates,” Hayes said.

The VA, he added, is delivering record levels of health care and benefits to veterans under the 2022 PACT Act, which expanded veterans’ eligibility for VA health care and benefits if they were exposed to toxic substances during their military service.

Since President Joe Biden signed the PACT Act, more than 710,000 veterans have enrolled in VA health care, a more than 34% increase compared to the same period before the legislation.

VBA also expects to break new records this year for the volume of disability benefits claims it’ll pay out to veterans.

“These important results for veterans and survivors exceeded initial expectations,” Hayes said.

The VA, in its FY 2025 budget request, planned to reduce its workforce headcount by 10,000 employees — with most of those jobs coming from VHA.

However, Bost said VHA is now looking at a staffing increase of 22,000 full-time employees over the same period. About 17,000 employees, he added, have already been hired, and VHA is looking to hire another 5,000 employees.

“Hiring quality health care workers is difficult enough without a constantly moving target,” he wrote.

VHA hired more than 61,000 employees last year — its fastest rate of growth in 15 years. The agency grew its total workforce by more than 7% and now has more than 400,000 employees for the first time in its history.

In addition, efforts to boost retention also led to a 20% decrease in turnover between 2022 and 2023.

McDonough told reporters in February that VHA is managing its workforce with a “tighter fiscal picture,” but added that the department is taking a more targeted approach to hiring, after the agency exceeded its hiring targets last year.

“Where we’re not hiring, it’s not because we haven’t been able to hire. It’s because we don’t have a need. Why would we not have a need? Because we just had a great year of hiring,” McDonough said Feb. 26 at a monthly press conference at VA headquarters.

VHA, in some cases, has rescinded tentative and final job offers it made to prospective hires. But the agency ordered a “strategic pause” on rescinding job offers in January, and later issued a memo directing VA health care facilities to only rescind job offers “as an action of last resort.”

VA officials have repeatedly stated the department isn’t under a hiring freeze. However, a lengthy hiring process — even by the federal government’s standards — is frustrating job applicants, especially those who have accepted tentative job offers, but have yet to receive a final job offer.

Under Secretary for Health Shereef Elnahal told VHA employees, in a Feb. 5 email obtained by Federal News Network, that following last year’s record hiring, “we have the nationwide staffing level we need to accomplish this important mission — and we have the funding we need to care for veterans through 2024 and into 2025.”

“As responsible stewards of these funds, we must make thoughtful decisions about resource use at every level of the enterprise,” Elnahal wrote. “This means that we will not be hiring at the same rate we did last year but let me be clear: there is no hiring freeze, we will continue to hire in key areas, and we will do everything in our power to continue supporting our current workforce.”

Bost is asking McDonough if the VA is seeing “significant, unexpected changes in demand for in-house care” since Elnahal’s email to employees. If the agency isn’t seeing a sudden change in demand, he’s asking the department to explain the need for increased staffing.

“Given Under Secretary for Health Elnahal’s announced policy of nationwide hiring restrictions and managing by attrition, I think veterans and employees deserve a much better explanation of where these 22,304 FTE are being hired,” Bost wrote.

Bost said the VA has repeatedly shifted regular expenses out of its base budget and into the Toxic Exposures Fund, which was created under the PACT Act.

“VA’s budget has become increasingly complicated and reliant on gimmicks, apparently to compensate for the expiration of one-time, pandemic-related supplemental funding,” Bost wrote. “This has created a situation where one bad estimate or unanticipated event can create a shortfall in multiple accounts.”

The VA, for example, is seeing an increase in community care costs for veterans to receive health care outside the VA medical system.  But Bost said the department isn’t covering those increased costs in its base budget — “seemingly straining, if not breaking, the limits of what the Toxic Exposures Fund can pay for.”

Bost said VA’s compensation and pension costs are running below its budget projects, so far this fiscal year. But VBA typically sees those costs surge at the end of the fiscal year — especially with an increase in claims submitted under the PACT Act.

VBA processed 1.98 million disability benefits claims and issued $163 billion in total benefits in FY 2023. Under Secretary for Benefits Joshua Jacobs recently told reporters that VBA is on pace to process 30% more claims in fiscal 2024 compared to last year.

The agency, so far this year, has awarded $112 billion to veterans and their survivors in compensation and benefits. VBA also recently granted its millionth benefits claim under the PACT Act.

VA told the committee it anticipates a more than $3.8 billion increase in pharmaceutical and prosthetics spending across FY 2024 and 2025.

Bost said VHA’s chief financial officer also suggested that the Change Healthcare ransomware attack may be to blame for some of VA’s budget shortfalls. The ransomware affected many public and private health care systems across the country.

The VA is shifting $700 million in medical collections from this fiscal year to FY 2025 because of the ransomware attack.

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In a recent interview with an executive of the industry group, the Professional Services Council, I discussed the State Department’s plan to establish three federally-funded research and development centers, FFRDCs. Industry was puzzled by this move because of the nature of State Department’s requirement, facilitate public private collaboration for numerous activities related to diplomacy and modernization. Joining the Federal Drive with Tom Temin with the State Department’s view, the Deputy Assistant Secretary for Acquisition and Senior Procurement Executive, Michael Derrios.

Interview transcript: 

Tom Temin  Mr. Derrios, good to have you in studio.

Michael Derrios  Hi, Tom, thanks for having me.

Tom Temin  Let’s begin at the beginning. FFRDCs, you have a RFQ out now for three of them. Tell us the purpose here.

Michael Derrios  Sure. And actually, I’ll clarify, it’s actually not an RFQ, we’re not quite there to that part of the process. So, this is the federal register process where we have a 90-day clock. We’re taking in public comments during the period. And then at the end of that process, we’ll be putting out an RFP. I want to stress that point because I think that that’s probably something that industry and trade associations should think about. So, what you see right now in those very broad-scoped buckets, if you will, in that notice, is really just again, broad language that describes what the centers would would do in an R&D environment for the mission set. The specific requirements are going to be contained in that RFP at the end of the public comment period.

Tom Temin  But at first glance, you think of FFRDCs for scientific-related agencies, looking for partners, typically non-profits, the miters, and so forth of the world to do research in scientific technical areas. State Department is loosey-goosey, diplomacy in getting along with people, advising military. So, give us the vision here.

Michael Derrios  I’m so glad that you actually mentioned that, Tom. I think that a lot of people don’t actually know about the the real robustness of the mission set. When you when you think about R&D, and what, well, actually, you know what, let me start here. We use FFRDCs today. This is not a new thing for us. We’re already leveraging FFRDCs through other agencies, so, Treasury, DHS, etc. What’s new for us is wanting to sponsor agreements with FFRDCs for the first time directly. So, the usage of FFRDCs is definitely not new for the department. And that’s because we absolutely have requirements that fit that space. If you think about diplomatic security, or INL, International Narcotics and Law Enforcement. We also have a bureau focused on paramilitary affairs. We actually have an office of science and technology. So, you know, the mission set is actually much broader than I think a lot of people realize. A lot of folks kind of associate the bigger bureaus like Consular Affairs, which would also have, I think, some requirements that would fit in this space, or Diplomatic Security, formerly known as IRM. There are a variety of areas across the mission set that I think would would benefit from direct usage of FFRDCs. And just to kind of peel back the layer of the onion a little bit more, we’re trying to solve for three problems. Essentially, it’s scope, it’s ceiling, and it’s expedited access. When we leverage FFRDCs through other agencies, we have to use the interagency process for that. So, there’s a lot of documentation that goes into that.

Tom Temin  A lot of bureaucracy.

Michael Derrios  Absolutely, absolutely. Oftentimes, we are challenged with trying to fit our scope into the nature of their vehicles, make sure that it’s a clean fit. In some cases, that could mean that we are cutting our requirements to try to fit into their box, if you will. And then the other piece of it is ceiling. Rightfully so, any agency is going to scrutinize the ceiling on their vehicle, because the dollar. They want to make sure that they can support their internal customer base and you know, and others if they do support other agencies, but they’re going to protect the scope and the ceiling mostly on their vehicles, very tightly, as they should. We have seen where we’ve been kicked off of vehicles because of ceiling issues, right? And then you’ve touched on it, the bureaucracy. So, getting access, just getting on the vehicle can sometimes be a very elongated process. You’re talking about interagency documents that have to be signed on both sides. Again, there’s that negotiation about the scope and the ceiling. And sometimes it could be months before we’re actually able to tap into one of the vehicles. So, by issuing direct sponsoring agreements, we’re trying to solve for those three issues. And most importantly, I would say, structure agreements with FFRDCs that are very unique and tailored to what we need.

Tom Temin  We’re speaking with Michael Derrios. He’s deputy assistant secretary of state for acquisition and the senior procurement executive. And, for the FFRDC types of requirements that could be filled that way, where do your demand signals come from? Is it from those areas you mentioned, diplomatic security, paramilitary office?

Michael Derrios  Yeah, great question. Frankly, I think a variety of the bureaus in the department would be users. I’ve been contacted twice in the last month from offices that are asking, hey, Mike, is ready to go yet? We’re actually nowhere near being ready to go yet. That’s an indication of how much interest there is. And we obviously did the, we looked at how much usage we have today. Through the interagency process, we’ve done some pulsing. So, we know that there’s definitely a demand signal. I think there’s a variety of organizations that could use it. So, the benefit of an FFRDC arrangement is that it gives us the ability to enter into a kind of trusted relationship with a nonprofit organization. And the FAR actually encourages us to have a long term relationship. And also, it’s the ability to share information and data that we can’t always share with for-profit companies for a variety of reasons.

Tom Temin  Because that was one of my questions. Are some of these things, could they ordinarily be done by some of the big, broad based contractors, the Lighthouses or the SAICs of the world?

Michael Derrios  Sure, yeah. So, we’re going to be governing the process very tightly. We’re going to establish an apparatus to make sure that as requirements come in, we’re vetting those and that we know that they’re a good fit, number one, for R&D work. And, then, the customer, you know, is actually wanting to use the right center within the construct. And, then, three, is this a fit for industry? There’s actually two key words, when you look at FAR part 35 and the policy that describes FFRDCs. Actually, two key words. It talks about, you know, whether or not industry can as effectively do the work. I think those two words actually offer us a lot of broad latitude to make that determination. I’m not a requirements owner, but I’m going to illustrate, you know, potential requirements for you right to try to explain that. So, I don’t think it’s out of the realm of possible for diplomatic security to come to us and say, hey, we’re interested in R&Ding some security solutions, right? And maybe we would want to feed in FFRDC threat information that we couldn’t necessarily share with a for-profit company, right? To help us develop and prototype something unique for diplomatic security. You can say the same thing for potentially cyber missions across the department. Variety of different organizations, kind of, you know, collectively own that. Intel and INR, you know, intelligence. There could be a need.

Tom Temin  Yeah, I was wondering about the paramilitary, thinking about something that’s kind of been wiped off of the front pages, so to speak. And that’s what’s going on in Haiti. Unfortunately, the nation has focused on the President’s mental acuity or whatever that might be, instead of issues like Haiti, which I think is still festering.

Michael Derrios  Yes. And we’re actually, the State Department is very actively involved in the situation with Haiti. Can’t speak on the broader issue you raised, but definitely, whether it’s studies—

Tom Temin  It’s just dealing with that weird situation where you write government that has a rival that’s as powerful as the government, in this kind of distributed paramilitary situation.

Michael Derrios  Right, and the ability to possibly tap into an FFRDC that could offer some very technical knowledge and help us study a problem set and potentially propose alternative approaches to addressing something, right? And that’s the kind of work that we’re talking about. So the need is absolutely there. I would say to trade associations, and in our industry partners, bear with us. Take a look at the RFP when it comes out, and offer a little bit of trust. We are going to put a very tight governance process on this. And if something is a much better fit for industry, we’re going to go in that direction.

Tom Temin  Sure. And how do you budget for this? Because in some sense, an FFRDC functions in almost like an IDIQ mode. And so you have to know what your ceiling is, what state department’s ceiling will be, without knowing how much once it’s established, people could come running and saying, hey, we need this and that done.

Michael Derrios  Now, that’s a fantastic point. So my policy shop is actually doing all of the outreach today to build a statement of objectives. And then we’re pulsing the department to figure out what we think those requirements might look like over a five-year period. And the way that FFRDCs work is we’re required to actually examine the usage after a five-year period and determine whether or not it makes sense to continue on with that relationship. But yeah, we’re definitely wanting to pulse right now to figure out what the ceiling should be set at for these vehicles, because, you’re right, they are IDIQs. It’s not a matter of, you know, forward funding anything. We’re going to fund at the task order level as requirements come in. But we definitely are trying to do that pulsing across the department today to figure out what the demand signal will be in terms of potential dollars.

Tom Temin  All right, so, any other great procurement initiatives we should know about from state?

Michael Derrios  I would say, you know, we are actually trying to get OTA authority as well, which I think you’re aware of.

Tom Temin  Other transaction authority, uninitiated listening.

Michael Derrios  Yeah. And the main thing there is to really to try to attract non-traditional companies to the mission set. We know that there are a variety of companies out there, especially small startups that offer some tremendous capability that just don’t always want to deal with the bureaucracy of a federal contract in its typical form. So, if we had the ability to tap into those companies, that would greatly expand our industrial base. So, we’re working on that as well.

Tom Temin  All right, we’ll have to have you back when some of these things start to take concrete form.

Michael Derrios  Happy to do it.

Tom Temin  All right. Michael Barrios is deputy assistant secretary of state for acquisition and the senior procurement executive. Thanks so much for joining us.

Michael Derrios  Thank you.

Tom Temin  We’ll post this interview along with a link to more information at federalnewsnetwork.com/federaldrive. Subscribe to the Federal Drive wherever you get your podcasts.

The post Why the State Department wants to set up federally-funded research and development centers first appeared on Federal News Network.

A federal judge in Texas last month blocked a raft of new rules from the Labor Department concerning federal construction projects. One rule would have imposed so-called prevailing wage rates on every federal contract. Another would have imposed prevailing wages on construction material suppliers and truck drivers. Attorney Andrew Bellwoar from the Jackson Lewis law firm joins the Federal Drive with Tom Temin with the implications of this ruling.

Interview transcript: 

Tom Temin  Mr. Bellwoar, good to have you with us.

Andrew Bellwoar  Thanks for having me, Tom. I appreciate it.

Tom Temin  And just give us the outlines of this case, what happened? It sounds like the Associated General Contractors and groups like that sued over these voluminous rules.

Andrew Bellwoar  That’s exactly right. So, back in August of 2023, the DOL issued a whole bunch of sweeping regulations that would have changed essentially the entire framework of the Davis Bacon Act and related act. And this is the first major update in years, decades, even. And it had a whole bunch of far-reaching impacts, it could have affected over a million different construction workers throughout the nation.

Tom Temin  Sure. And just a brief review, Davis Bacon goes back to the 1930s, right? And this administration, I mean, let’s face it, Democratic administrations tend to interpret prevailing as prevailing union wages.

Andrew Bellwoar  It does. So it was instituted a long time ago, essentially to protect local workforces to make sure that they weren’t undercut by workers coming in from elsewhere. But effectively, especially these days, what it does is it sets a prevailing wage floor for any kind of government contract that’s based on public works or public buildings, specifically for laborers and mechanics that are on the worksite. So, that’s a very important thing, especially for this case. Correct. And part of the regulations that the DOL was seeking to impose here and actually were unaffected by this case, is the way to calculate that prevailing wage and it boils down to, it is going to result in higher wages for different laborers on these projects.

Tom Temin  Let’s get to the rest of the rules. That was about wages for construction, but what about the truck drivers and material suppliers?

Andrew Bellwoar  So, that was one of the major things that was challenged by the plaintiffs in this case. Essentially, what the DOL tried to do is expand who would be given these prevailing wages, who the DBA and regulations would be applicable to. So, that includes, as you pointed out, certain material suppliers and certain truckers that, before, they really wouldn’t have had been subject to these wages. And it put the contractors and subcontractors in a very difficult position, as the court pointed out.

Tom Temin  Right, and these units, the truck drivers and the material suppliers, so named, were not part of the statute originally.

Andrew Bellwoar  Correct. So, there are some aspects of the regulations before and guidance before, that said material suppliers were accepted, actually, from the ability or from the requirement to pay these prevailing wages. And truck drivers, by the same token, when you think about it, they’re not really employed on the worksite, which is a very important part of when the DBA applies. But the DOL was trying to say, no, you need to pay at least some of these employees prevailing wages.

Tom Temin  This sounds a little bit, and then this decision came before the big Supreme Court decision on the Chevron deference, but Chevron is about laws that are vague. It sounds like the law was pretty clear about who’s covered and who’s not covered in this case. So, it’s Chevron-ish, but not necessarily one of those types of cases?

Andrew Bellwoar  Exactly. Yeah. It shares some of the same undercurrents, which is courts pushing back on what these, I guess, more activist agencies are trying to do as far as making rules and trying to impose these requirements wider than the statutory language might permit them to do. So, this is a little bit different in that, as you pointed out, the court said that this just completely goes against what the explicit language of the statute is. But, much like the case that overturn the Chevron deference, the court decided that the agency was acting outside of its scope there, outside of its permissible scope.

Tom Temin  We’re speaking with Andrew Bellwoar, he is an attorney at the Jackson Lewis Law Firm. And, therefore, what happens? The rules are invalidated, or this is simply a cease and desist, and it’ll be appealed by the administration? What’s the status right now?

Andrew Bellwoar  The vast majority of the regulations that DOL put in place are still there. This case is in particular focused on three main aspects of what the DOL was trying to do. That’s the operation of law, the material supplier and the trucker aspects of it. What the court did here is issue a preliminary injunction saying that the DOL is prevented from enforcing or applying these rules throughout the nation while the court interprets the final decision on this matter. But tied in with that preliminary injunction is the court saying that the plaintiffs are almost definitely going to succeed.

Tom Temin  Right. And do you feel this case is strong enough that even if it had come to, you know, one of the liberal, so to speak, circuits in California, they still would have prevailed?

Andrew Bellwoar  I think it’s possible. You know, it’s always difficult to say, well, one court is going to do, versus not do, but the statutory language was clear enough here and there were a lot of different comments that went into the proposed rulemaking that, it, at the very least, would have made one of the more liberal judges pause before they ended up giving some kind of rubber stamp to the DOL.

Tom Temin  Sure. And there’s also the issue, just a practical matter, and that is prevailing wages vary a great deal. And there are some areas of the country where there is federal construction, it could be a bridge, it could be a new roof on a federal courthouse somewhere in a rural area, or a small state where there is not union prevalence, or if it is, it’s still lower paid than if you were doing a building construction project which the government does in Manhattan. Sure, where an order of magnitude different wages. So, does this then preserve the flexibility that actual contracting officers have to contract for construction based on location and prevailing wage? Does that make sense?

Andrew Bellwoar  Yes. So, that’s one of the aspects that was unchanged by this ruling for what it’s worth. There is a new regulation based off of what the DOL tried to do with their rulemaking that alters how prevailing wages are calculated for particular regions. As we talked about a little bit earlier, that is going to raise what employees are paid under the prevailing wage provisions. But it’s entirely possible that that’s going to be challenged in the near future. I’d say it’s even likely.

Tom Temin  Because when you look at the big names on cranes and big cities, it always seems to be the same half a dozen construction companies, and they’re probably unionized, but, at the smaller level, they are not, and minority companies may not be unionized. So, does this equal the playing field or return some level to the playing field for minority-owned contractors, do you think?

Andrew Bellwoar  There is some flexibility that’s built into these regulations. I’d say that this ruling in particular, especially related to those three provisions, it does bring back some flexibility there, especially based off of what the DOL was trying to do. As far as overall for these projects. I wouldn’t say that there’s a huge impact. But I’d say that there might be something in the near future related to that.

Tom Temin  All right. Well, let’s try to do a little imagining here, then. Suppose you’re a federal contracting officer, and you specialize in construction. Do you need to do anything differently now than you did before in evaluating bids?

Andrew Bellwoar  No, I mean, honestly, you’re coming down to the same lowest responsible bidder for these kinds of things. The one thing that I think is very important is we are returning to a little bit more sensibility in what would fall under that category. You know, the court really pushed back on the idea that these DOL, or or prevailing wage provisions would be read into any kind of contract like that, regardless of whether it was in the bid. But as far as evaluating the bids, as a contracting officer, your job is pretty much the same as it was before this ruling came out.

Tom Temin  Sure, but there is language you don’t have to put in contracts anymore as in the words of the regulation, operation of law. Maybe just elaborate on that point a little bit for us.

Andrew Bellwoar  Sure. So by the Davis Bacon Act, and its related acts, contracts subject to DBA regulations, that is prevailing wages, reporting, requirements, all those kinds of things, they’re required to have what the prevailing wages on these contracts are. What the operation of law provision would have done is say the DOL can retroactively say that the DBA provisions should have applied. The statute is explicit that those kinds of provisions are supposed to be in the contracts themselves, so that these contractors actually know what they’re going to be getting into. And I think that that was actually a very sensible ruling coming out.

Tom Temin  Does that mean otherwise that contractors would have had to dig in and pay back wages?

Andrew Bellwoar  That’s exactly what it means. On top of the administrative costs, and really, the headaches of trying to retroactively comply with all the different provisions, record keeping and making sure you have certified payrolls, all of that kind of stuff, exactly, as the Court pointed out, would be a huge expense that isn’t encompassed by what the DOL was trying to do here.

Tom Temin  You can see the Bacon in Davis Bacon here. And finally, what about contractors? Do they need to do anything differently now as a result of this ruling, or it should feel normal to them?

Andrew Bellwoar  It should feel pretty normal. Obviously, there’s a lot of changes that came in with the rulemaking that went into effect in October of 2023. Thankfully, these three provisions are no longer in there. So contractors aren’t left to wonder, will the Davis Bacon Act apply? Will it not? That’s something that will hopefully bring a lot of clarity to this prospect. And there is a lot that is similar to what was done before, but at the same time, it’s changing landscape. Especially looking forward, we’ll see what actually stays in place and what doesn’t.

Tom Temin  Yeah, you can never be unvigilant in this world today. Andrew Bellwoar is an attorney at the Jackson Lewis Firm. Thanks so much for joining me.

Andrew Bellwoar  Thanks very much, Tom. I appreciate it.

Tom Temin  We’ll post this interview along with a link to his analysis at federalnewsnetwork.com/federaldrive. Subscribe to the Federal Drive wherever you get your podcasts.

The post Why a federal court sunk a raft of construction industry rules from the Labor Department first appeared on Federal News Network.

Pretty much every lawyer, lobbyist, rule-maker, think-tanker and wonk in Washington and beyond has been thinking about the same thing. The Supreme Court decision that ended the idea that courts should always defer to federal agencies for interpreting vague laws. As we’ve reported, the so-called Chevron decision has implications for all three branches of government. Joining the Federal Drive with Tom Temin with how Congress might deal with it, a senior policy analyst at the Bipartisan Policy Center, J. D. Rackey.

Interview transcript: 

Tom Temin  Mr. Rackey, good to have you with us.

J.D. Rackey  Good to be here. Thanks for having me.

Tom Temin  And you worked on the Hill, so you probably saw some of that sausage being made. What’s your overall take on the meaning of this for Congress?

J.D. Rackey  At a high level, I think the biggest takeaway is that Congress is going to have to be much more active than it has become accustomed to over the past 40 years. And it’s going to need to give itself a lot more resources than it has to be able to accomplish this new style of lawmaking, that the court is kind of insisting that it adopt.

Tom Temin  Right, so the immediate implication for those looking in from the outside is that they would have to maybe make more laws, one for each specific thing it wanted to do. And rather than, say, make the air cleaner, regulate this gas or that particulate, which they have not done. Am I making it too simple, or Is that about right?

J.D. Rackey  So, there’s a couple of different ways that they could approach it. They could approach it that way, and being very particular in how they draft legislation, almost to the point of drafting the regulation themselves. Or it could mean something a little bit more looser, where, say, for example, they want to direct the agencies to protect personal information from AI entities. And, so, before, they could just say, agencies protect personal information from AI, and agencies could figure out how to do that. Whereas now, they might have to define what is AI? What is personal information? What contexts do we want to protect personal information from AI? And even that level of specificity, Congress doesn’t necessarily have the expertise in AI policy, or, and, this is transferable to any policy area, to accomplish that kind of lawmaking, as it stands.

Tom Temin  Right, and, so, yes, you’re arguing for more resources, in other words, to inform Congress of how it has to do its job based on knowledge of specific technologies or areas of the economy.

J.D. Rackey  Pick your policy area, I think this will apply. And, so, while some people have cheered for this ruling, that it’s going to lessen the the amount of regulation that government is creating, I think this really is going to have an impact on all future lawmaking, and how all legislation is drafted. So, even the things that where there’s bipartisan agreement on, or where small government proponents still want to legislate, they’re still going to be affected by this.

Tom Temin  And, by the way, I noticed from your biography that one of the places you worked in Congress was on the select committee for the modernization of Congress. We had members of that committee on repeatedly over the past few years. Was this something envisioned as part of modernizing Congress?

J.D. Rackey  In a way. So, we certainly didn’t know that this court case was going to be taken up. But I think the select committee, a lot of our work was driven at reclaiming Article One authorities within Congress and building congressional capacity so that Congress could be more active and kind of direct government in the way that the Constitution envisioned. And, so, while we did a lot of work, and over three quarters of the committee’s recommendations have been implemented or are on their way to implementation, I don’t think those recommendations go far enough to help Congress reckon with the new landscape. But it’s certainly all of that work the past five years has started to, I think, shift Congress’s mentality in how it views itself and its role in the system.

Tom Temin  We’re speaking with J.D. Rackey. He’s a senior policy analyst at the Bipartisan Policy Center. And, by my last count, the staff of Congress, so to speak, was about 30,000 people. And they are overseeing a bureaucracy that has about two million people. So, there’s a little bit of inequality there with respect to deep subject matter expertise. But where do you envision this added resource for Congress occurring, in the committee staffs, in the personal staffs, or in the agencies such as GAO, which is trying to build its science and technology expertise for some years now, in places like that?

J.D. Rackey  I kind of envision across the board they will increase the resources. I think the kind of most pressing area will be in committees, particularly increasing nonpartisan committee staff who are policy experts. You know, we’ve seen committee size committee staff sizes shrink by about a third over the past 30 years. So, that’s one immediate area that could be increased. I think the other biggest pressing area would be the support agencies, the Congressional Research Service, in particular, needs a lot more resources. And then there’s been proposals by others to create a new office of regulation so that maybe Congress can take a stronger hand in crafting regulations, and the science and technology implications of the decision are probably the most important and in the area where Congress is least prepared to act. And so either bringing back the old Office of Technology Assessment or giving more resources to this STAA within GAO should be considered. And I’ll say Congress has been kind of going back and forth on on that decision the past couple of years. There’s been a study by GAO at the direction of the Select Committee about which way Congress should go, and the Committee on House Administration has been studying that report. I think it just came back a month or two ago.

Tom Temin  OTA’s been gone 25 years, but not forgotten, you might say?

J.D. Rackey  Correct. It is still on the books, it just has no money. So it could it could be brought back and reformed relatively easily as as far as standing up agencies go. But I think the court decision is going to bring all of this discussion to a finer point and increase the urgency with which Congress has to deal with it.

Tom Temin  Yes, and, you know, the world seems to be getting more complicated. But in some sense, Congress had similar decisions on regulation, as far back as when, you know, canals were being cut through counties and so forth. You know, inland improvement, I think they call it back a couple centuries ago. But do you think that this would, the decision, the Chevron decision, would make Congress pause on whether something needs a law in the first place?

J.D. Rackey  I think the biggest implication of it is going to be when Congress decides a law does need to be made, does negotiations into what that law looks like, and will take much longer, need to be in much more detail. And, in some cases, you know, compromise could be inhibited cecause they can’t punt on the finer decision points to the agencies anymore.

Tom Temin  Right. And there’s also the opportunity for lots of weird specifics to come into a law, say, we want to regulate XYZ. But then the industry comes in and says, fine with XYZ, but not XYZ sub-part A, L and M. And odd things come into a law. Why is that exempt? Well, because somebody thought that should be and got in their ear.

J.D. Rackey  So, I’m a little less concerned about that. I kind of view that that’s always happened to some degree throughout the policy process throughout our history. So, I know there’s been a lot of focus on that this will make lobbying even more nefarious of Congress. And I think the impacts will be, on that aspect of it, will pretty much be the same it’s always been. There’s always been pressure groups and different people interested in different aspects of the law and have tried to get the ear of policymakers. And, from that perspective, I don’t see a change.

Tom Temin  And finally, what about the congressional oversight function? Do you see that changing as a result of this decision?

J.D. Rackey  Congress is going to need to do a lot more oversight, not just kind of hand-slapping oversight, but oversight to learn about policies. And, so, this, I think this is where the select committee is important. We piloted a couple of different ways of running hearings that are more focused on members learning information and less about grandstanding and less about fighting with each other for scoring partisan points, by, you know, getting rid of five minute statements and sitting in a roundtable format and kind of just having a normal discussion like we are here, that members can maybe learn more about information. And, so, I think Congress is going to need to do adopt some of those methodologies into its oversight function so that it can be better informed for lawmakers.

Tom Temin  Imagine a round table of normal discussion. We can dream, can’t we?

J.D. Rackey  It happens a little bit, but not not as much as it should.

Tom Temin  J.D. Rackey is a senior policy analyst at the Bipartisan Policy Center. Thanks so much for joining me.

J.D. Rackey  Thanks for having me.

Tom Temin  We’ll post this interview along with a link to his essay at federalnewsnetwork.com/federaldrive. Subscribe to the Federal Drive wherever you get your podcasts.

The post The Supreme Court Chevron decision spreads wider and wider first appeared on Federal News Network.

SBA is planning to upgrade its online certification platform, starting on Aug. 1. The agency wrote on its website that the upgraded system would be available for new applications by early September.

SBA says it will not accept new certification applications during the upgrade period.

“New and prospective applicants for federal small business certification are encouraged to wait until the upgrade is complete before applying,” the agency wrote on its website.

But Senate Small Business and Entrepreneurship Committee Ranking Member Joni Ernst (R-Iowa) and House Small Business Committee Chairman Roger Williams (R-Texas) are calling on SBA to delay its upgrade of the platform until the end of fiscal 2024.

Lawmakers, in a letter to SBA Administrator Isabella Casillas Guzman, say taking the certification platform offline in the final months of fiscal 2024 would create a “harmful timeline,” and cause problems for firms with critical year-end contracting deadlines that may need to recertify their small-business status to keep doing business with the federal government.

“Once again, the SBA is putting small businesses last and forcing them to navigate a bureaucratic mess,” Ernst and Williams told Federal News Network in a statement. “Shutting down the certification portal right before the end of the fiscal year, the busiest time for applications, without a clear timeframe for reopening is completely unacceptable.”

Federal agencies award a large portion of their contracts in September, just before the end of the fiscal year.

“While we agree with the decision to improve this critical technology platform, we are deeply concerned with the ill-conceived timeline and lack of consideration the SBA has shown towards small businesses in making this decision,” the lawmakers wrote in a letter to the agency. “Closing the certification portal during this critical juncture, especially as such upgrades do not appear to be time-sensitive or essential, displays a worrisome insensitivity to small businesses new to federal contracting.”

SBA wrote most small businesses already certified by the agency would not be impacted by the pause in applications. The agency said it would send guidance to small firms needing to renew their SBA certification during the upgrade period.

SBA is encouraging prospective small business applicants to wait until the upgrade is finished to apply.

Lawmakers, however, are concerned SBA hasn’t provided a set date, beyond “early September,” or shared any contingency plans, in case the upgrade project runs into unexpected delays.

“Lacking such information, it is unclear why the SBA needs to undertake this massive disruption in services in August,” they wrote.

SBA’s anticipated upgrade would impact all its socioeconomic set-asides contracting programs:

• Women-owned small businesses (WOSB)
• Economically disadvantaged women-owned small businesses (EDWOSB)
• Veteran-owned small businesses (VOSB)
• Service-disabled veteran-owned small businesses (SDVOSB)
• Historically underutilized business zones (HUBZone)

SBA published a final rule last month that will eliminate self-certification for Service-disabled veteran-owned small businesses whose contracts or subcontracts with the federal government count toward its small-business contracting goals. The final rule will go into effect on Aug. 5.

“As SDVOSBs have recently been told that they need to apply for certification, new registrants may be dismayed to learn they are unable to do so,” Ernst and Williams wrote. “After serving our country with honor, America’s service-disabled veterans should not face unnecessary hardships or delays in pursuing contract opportunities as they seek new certification.”

In January 2023, SBA took over the work of certifying new veteran-owned small businesses through its Veteran Small Business Certification (VetCert) program. The Department of Veterans Affairs previously certified these firms, but Congress moved this work over to SBA in the FY 2021 National Defense Authorization Act.

As part of the transition, SBA brought over 13 former VA employees and made seven additional hires last year. It also brought over 50 contractor employees who previously worked at VA to handle application processing and operate its call center.

SBA chose not to migrate VA’s certification management system. Instead, the SBA brought all its certification and loan programs onto a unified digital platform called MySBA.

The lawmakers said it remains unclear if upgrades to the online certification platform would impact the VetCert or MySBA portals.

Ernst and Williams said SBA notified their committees about the certification system upgrade in a “last-minute call” on June 13.

“The sudden announcement of an impending certification shutdown does not provide enough time for small businesses to react or reorganize,” they wrote. “Many small businesses are likely to remain unaware of this development until the moment they seek to access the certification portal, only to discover it is nonoperational.”

The lawmakers also said SBA hasn’t done enough to make small businesses aware of the upcoming changes, or advise impacted firms on how to renew their small-business certifications ahead of the planned outage.

“It is unreasonable for the SBA to assume full public awareness by simply posting information buried on its website, less than six weeks prior to the system shutdown,” Ernst and Williams wrote. “It is also unclear whether the SBA has appropriately informed its resource partners, as it will impact the services those entities can provide.”

According to the letter, SBA assured lawmakers and their staff that “there was little need for concern, as SBA had an excellent technical team.”

However, Ernst and Williams said SBA Acting Chief Information Officer Stephen Kucharski was not on the call, and that SBA officials did not say if the agency was relying on external contractors to assist with the portal upgrade.

Among their requests, Ernst and Williams are asking SBA for alternative plans that would allow the agency to keep accepting and processing certification requests during the update, “as opposed to a full shutdown.”

The lawmakers are asking SBA for a full list of the intended upgrades to the certification platform, and how the upgrades will improve the customer experience for small firms going through the certification process, as well as flagging fraudulent applications.

Ernst and Williams are asking SBA to provide responses to their full rundown of more than a dozen questions by Friday, July 19.

SBA, over the past few years, phased out the ability for companies to self-certify as small, disadvantaged businesses that are eligible to compete for federal set-aside contracts.

The agency finalized a rule in 2020 that allowed some participants in its Women-Owned Small Business (WOSB) program to self-certify their eligibility.

A provision in the 2015 NDAA mandated SBA put an end to the self-certifications.

The Government Accountability Office reported in March 2019 that about 40% of the WOSB-certified businesses in its audit sample were ineligible to participate in the program. GAO also expressed concerns about the performance of several third-party WOSB certifiers

More than one in four dollars spent on federal contracts go to small businesses.

The federal government exceeded its overall small business contracting goal in fiscal 2023. Ten agencies received an “A+” for meeting their small business contracting goals, and another two agencies received “A” grades.

The post GOP lawmakers demand SBA postpone IT upgrades amid year-end contract spending surge first appeared on Federal News Network.

The IRS has collected $1 billion in overdue tax revenue, after launching a crackdown on millionaires not paying what they owe.

The agency last fall announced it was going after 1,600 wealthy individuals with more than $1 million in annual income and more than $250,000 in tax debt.

IRS Commissioner Danny Werfel told reporters that audit rates for high-wealth individuals and complex partnerships fell over the last decade and have been at “historic lows.”

But the IRS is tapping into tens of billions of multi-year modernization funds in the Inflation Reduction Act to rebuild its workforce and beef up its enforcement operations.

“Our message for these taxpayers is that now that we are resourced, we can do the job of ensuring that they pay,” Werfel said in a call Wednesday.

Treasury Secretary Janet Yellen called the initiative a “huge success,” and said the IRS has “shown that it can successfully launch strategic new initiatives and achieve the greatest return on investment.”

Yellen said that if the IRS can sustain ongoing enforcement, technology and data investments it will be able to recover an additional $851 billion in additional revenue over the next decade.

The IRS expects to recoup even more overdue tax revenue from high-income individuals.

The agency mailed 25,000 notices to taxpayers with more than $1 million in annual income. Another 100,000 notices went to taxpayers with $400,000 to $1 million in income.

“The amount of non-filing involved in these mailings is deeply concerning,” Werfel said.

IRS personnel are still following up with taxpayers who received these tax notes. The agency expects to have an update on the amount of tax revenue collected through this initiative this fall.

“Unfortunately, a lot of the taxpayers that we reach out to either don’t respond, or we end up in a situation where there’s a lot of back and forth to determine and to convince the taxpayer that they owe, and it’s in their best interest to pay,” Werfel said. “Ultimately, these cases get closed out typically after a lot of back and forth between the IRS after that initial letter is due.”

Werfel said that before the Inflation Reduction Act, IRS employees were “stretched too thin to get to all these cases.”

“Too often during the past decade, the IRS didn’t have the resources or staffing to pursue high-income earners who our compliance teams knew owed taxes,” Werfel said. “The tax bill wasn’t even in dispute. The taxes were clearly owed by these people, but we didn’t have the people or the resources to follow up with them.”

The agency is using artificial intelligence tools to help identify high-income individuals and businesses that are not paying what they owe.

“AI will help us ensure that we are not reaching out to taxpayers that are following the rules. It helps us be more precise in reaching out to those taxpayers that are most likely not playing by the rules,” Werfel said. “And this will create less stress for taxpayers who don’t want to get a letter from the IRS, especially if they’re playing by the rules. And it will provide more value to the taxpayers, because we will have better precision in who to reach out to make sure they’re paying their debts on time.

Werfel said the agency is also ramping up hiring to build out its enforcement capabilities.

The post IRS recovers $1B in crackdown on taxes owed by millionaires first appeared on Federal News Network.

The federal government is among the biggest spenders on advertising. At about $1.3 billion a year, it’s in the top 25 U.S. spenders. The Government Accountability Office has new analysis of which agencies spend the most on advertising, and the companies they spend it with. GAO’s Director of Strategic Issues Jessica Lucas-Judy joins the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin
Jessica Lucas-Judy. Ms. Lucas-Judy, what prompted GAO to look at something that in the grand scheme of things is not that big of a deal? Spending wise.

Jessica Lucas-Judy
This is something that we have done a series of reports on over the last several years. Last one was in 2018. And there are members of Congress who are interested in this and involved in in small businesses, and primarily wanting to know, what kinds of businesses are getting these contracts? And what sort of opportunities are available? And are the people who are being communicated with, the ones who would be the recipients of the messages from federal agencies? Are they represented in the companies that are getting those contracts?

Tom Temin
All right. And I imagine it’s the Department of Defense that spends the most, I’m guessing, because of recruitment efforts by the armed services?

Jessica Lucas-Judy
That is definitely a big part of their advertising. So when you think about federal government, you don’t necessarily think about advertising. But just like you said, being a recruitment is a big category, public awareness about health issues or what to do in the case of a disaster, what advertising about the kinds of services that agencies provide and how to access them, those are all very important messages that come from government agencies. So just like you said, the Department of Defense is the biggest spender overall. And that’s consistent with our last report from 2018, that DoD was one of the biggest Health and Human Services and the Department of Homeland Security, likewise, have large contract obligations overall. And then, for advertising in particular.

Tom Temin
And over the past 10 years, you have a bar chart that shows fairly steady growth with a big spike in 2020. And that would have been because of programs related to COVID relief.

Jessica Lucas-Judy
That was definitely one of them. I think the census was probably another spike as well, one of the things to keep in mind when looking at the data is that these are small, relatively small dollar amounts overall, and relatively small number of companies that are involved. And so any fluctuation if a big contract is awarded in one year, that might be a multi year contract, that’ll cause a spike in the data. What we found was that overall, the the spending generally increased in the 10 year period that we were looking at. And the percentage of dollars that went to what we’re calling specified businesses. So these are small businesses for those owned by primarily by women or by minorities, that the percentage of dollars that went to those specified businesses stayed roughly the same as 14-15%, for the most part.

Tom Temin
And is there any evidence or any way to determine really whether if, say, spending went to hidden Hispanic owned ad agency. That was for the purposes of reaching the Hispanic audience? And so on and so on? Or do we know that at all.

Jessica Lucas-Judy
That’s something that would be really interesting. But unfortunately, with the data that we had available, that’s not something that we could determine, like, what specifically the contracts were for, you’d have to do contract by contract review.

Tom Temin
And what about where the spending ends up, because you pay an agency at least traditionally, 15% of the media cost, or the agency gets the discount and keeps the 15% or whatever. And at one time you used to see army ads on television, national TV, that’s expensive. And if you’re at the 1.3 billion level a year, you’re not buying much national television.

Jessica Lucas-Judy
Again, that’s something that’d be really interesting to see, but not with the data that we have. We weren’t able to do that.

Tom Temin
I guess I’m showing my media background here.

Jessica Lucas-Judy
All we have a really is a very general information about the company and the category of company, and then the category of of advertising. It was the same thing with the COVID related contracts. It’s just a checkbox in the national contracting data. So not something unless we were going to do a deep dive, which would have taken much more time than we were going to be able to put into this.

Tom Temin
We’re speaking with Jessica Lucas-Judy, director of strategic issues at the Government Accountability Office. And of the 14%, I guess it was of that spending that went to minority and designated businesses. How does that break down? Hispanic owned is the largest share?

Jessica Lucas-Judy
So when you’re looking at the dollars, which is one of the ways that we got the data. About 47%, went to Hispanic owned Hispanic American owned businesses. And about 21% went to black American owned businesses. But then when you look at it by number of businesses, number of contracts that were awarded, and it worked out a little bit differently. It was, I believe is about 36%, went to Black American owned businesses, and 24% to Hispanic American owned businesses.

Tom Temin
So that’s just a fact. But there’s really not too much we can deduce of motivation or effect from any of that analysis.

Jessica Lucas-Judy
Correct. Mainly, what we were looking at were any significant changes over time. And again, with some slight fluctuations here and there, it was pretty consistent. It’s consistent with what we’d found before in our last report and this report. So, again, looking at just the number of businesses overall, there 2200 businesses in the 10-year-period. So again, not that many. In federal advertising overall, 39% businesses were the specified businesses that we were looking at.

Tom Temin
Did you talk to any agencies individually about what their strategies were for spending this money and what they had in mind?

Jessica Lucas-Judy
Just briefly, but not in any depth for this one?

Tom Temin
Got it. So we don’t really know whether the advertising spend is effective in terms of what their objectives were necessarily.

Jessica Lucas-Judy
Correct. That would have been a different kind of study.

Tom Temin
Let me ask you this. You said Congress, certain members are interested in this. This is why they call up GAO since you worked for Congress. What was their objective in having to do this study, do you think?

Jessica Lucas-Judy
Maybe they were just interested in the makeup of the companies that were getting these contracts, and wanting to make sure that they’re having an opportunity to get into these contracts and be able to communicate with the populations that they come from. We would be interested in doing additional work in this area? If that’s something that the members would like us to do? There’s certainly a lot more that one could do, if some of the topics that we’ve talked about in terms of getting down into some of the contracts maybe, or talking to individual agencies, maybe doing some case studies. That was something we’d done in prior years of talking with agencies about what their strategies were, how they have identified contracts, how they select contracts, and what the purposes of the specific contracts are.

Tom Temin
And interestingly, Homeland Security, which is one of those smaller spenders, had the highest percentage of dollars going to specified businesses. Whereas DoD, the biggest spender, had the among the smallest, only 6% going to designated.

Jessica Lucas-Judy
That was just one more way that you could slice and dice the data. And so when you looked at it by dollars, DoD, like you said was the biggest. When you look at it by percentage, NASA turned out to be the biggest, they had 99% of the contracts meant to specify businesses. But it’s a very small dollar amount overall. So again, one or two contracts, one way or the other, can really sway the difference.

Tom Temin
Sure, yeah. I’m trying to think why would NASA advertise at all. I guess, well, maybe jobs.

Jessica Lucas-Judy
Public awareness, recruitment, all those things.

Tom Temin
All right. Well, it looks like you didn’t have any recommendations with respect to ad spending.

Jessica Lucas-Judy
Yeah, this one, our purpose was just to look at the data to inform, answer questions, things like that. But we were not looking at any sort of compliance issues or things like that. There is some guidance out there for some of this, certainly the OMB and SBA, and other agencies are interested in, looking at where contracts go, and there’s some efforts to reach out specifically to make sure that small businesses, in particular, certain percentage of contracts, federal contracts overall. They’re awarded, but not specifically in advertising.

 

The post How the government spends a billion dollars a year on advertising first appeared on Federal News Network.

The federal government is among the biggest spenders on advertising. At about $1.3 billion a year, it’s in the top 25 U.S. spenders. The Government Accountability Office has new analysis of which agencies spend the most on advertising, and the companies they spend it with. GAO’s Director of Strategic Issues Jessica Lucas-Judy joins the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin
The federal government is among the biggest spenders on advertising at about $1.3 billion a year. It’s in the top 25. US spenders, the Government Accountability Office has new analysis of which agencies spend the most. And the companies they spend it with. We get more now from the GAOs director of strategic issues. Jessica Lucas-Judy. Ms. Lucas-Judy, what prompted GAO to look at something that in the grand scheme of things is not that big of a deal? Spending wise.

Jessica Lucas-Judy
This is something that we have done a series of reports on over the last several years. Last one was in 2018. And there are members of Congress who are interested in this and involved in in small businesses, and primarily wanting to know, what kinds of businesses are getting these contracts? And what sort of opportunities are available? And are the people who are being communicated with, the ones who would be the recipients of the messages from federal agencies? Are they represented in the companies that are getting those contracts?

Tom Temin
All right. And I imagine it’s the Department of Defense that spends the most, I’m guessing, because of recruitment efforts by the armed services?

Jessica Lucas-Judy
That is definitely a big part of their advertising. So when you think about federal government, you don’t necessarily think about advertising. But just like you said, being a recruitment is a big category, public awareness about health issues or what to do in the case of a disaster, what advertising about the kinds of services that agencies provide and how to access them, those are all very important messages that come from government agencies. So just like you said, the Department of Defense is the biggest spender overall. And that’s consistent with our last report from 2018, that DoD was one of the biggest Health and Human Services and the Department of Homeland Security, likewise, have large contract obligations overall. And then, for advertising in particular.

Tom Temin
And over the past 10 years, you have a bar chart that shows fairly steady growth with a big spike in 2020. And that would have been because of programs related to COVID relief.

Jessica Lucas-Judy
That was definitely one of them. I think the census was probably another spike as well, one of the things to keep in mind when looking at the data is that these are small, relatively small dollar amounts overall, and relatively small number of companies that are involved. And so any fluctuation if a big contract is awarded in one year, that might be a multi year contract, that’ll cause a spike in the data. What we found was that overall, the the spending generally increased in the 10 year period that we were looking at. And the percentage of dollars that went to what we’re calling specified businesses. So these are small businesses for those owned by primarily by women or by minorities, that the percentage of dollars that went to those specified businesses stayed roughly the same as 14-15%, for the most part.

Tom Temin
And is there any evidence or any way to determine really whether if, say, spending went to hidden Hispanic owned ad agency. That was for the purposes of reaching the Hispanic audience? And so on and so on? Or do we know that at all.

Jessica Lucas-Judy
That’s something that would be really interesting. But unfortunately, with the data that we had available, that’s not something that we could determine, like, what specifically the contracts were for, you’d have to do contract by contract review.

Tom Temin
And what about where the spending ends up, because you pay an agency at least traditionally, 15% of the media cost, or the agency gets the discount and keeps the 15% or whatever. And at one time you used to see army ads on television, national TV, that’s expensive. And if you’re at the 1.3 billion level a year, you’re not buying much national television.

Jessica Lucas-Judy
Again, that’s something that’d be really interesting to see, but not with the data that we have. We weren’t able to do that.

Tom Temin
I guess I’m showing my media background here.

Jessica Lucas-Judy
All we have a really is a very general information about the company and the category of company, and then the category of of advertising. It was the same thing with the COVID related contracts. It’s just a checkbox in the national contracting data. So not something unless we were going to do a deep dive, which would have taken much more time than we were going to be able to put into this.

Tom Temin
We’re speaking with Jessica Lucas-Judy, director of strategic issues at the Government Accountability Office. And of the 14%, I guess it was of that spending that went to minority and designated businesses. How does that break down? Hispanic owned is the largest share?

Jessica Lucas-Judy
So when you’re looking at the dollars, which is one of the ways that we got the data. About 47%, went to Hispanic owned Hispanic American owned businesses. And about 21% went to black American owned businesses. But then when you look at it by number of businesses, number of contracts that were awarded, and it worked out a little bit differently. It was, I believe is about 36%, went to Black American owned businesses, and 24% to Hispanic American owned businesses.

Tom Temin
So that’s just a fact. But there’s really not too much we can deduce of motivation or effect from any of that analysis.

Jessica Lucas-Judy
Correct. Mainly, what we were looking at were any significant changes over time. And again, with some slight fluctuations here and there, it was pretty consistent. It’s consistent with what we’d found before in our last report and this report. So, again, looking at just the number of businesses overall, there 2200 businesses in the 10-year-period. So again, not that many. In federal advertising overall, 39% businesses were the specified businesses that we were looking at.

Tom Temin
Did you talk to any agencies individually about what their strategies were for spending this money and what they had in mind?

Jessica Lucas-Judy
Just briefly, but not in any depth for this one?

Tom Temin
Got it. So we don’t really know whether the advertising spend is effective in terms of what their objectives were necessarily.

Jessica Lucas-Judy
Correct. That would have been a different kind of study.

Tom Temin
Let me ask you this. You said Congress, certain members are interested in this. This is why they call up GAO since you worked for Congress. What was their objective in having to do this study, do you think?

Jessica Lucas-Judy
Maybe they were just interested in the makeup of the companies that were getting these contracts, and wanting to make sure that they’re having an opportunity to get into these contracts and be able to communicate with the populations that they come from. We would be interested in doing additional work in this area? If that’s something that the members would like us to do? There’s certainly a lot more that one could do, if some of the topics that we’ve talked about in terms of getting down into some of the contracts maybe, or talking to individual agencies, maybe doing some case studies. That was something we’d done in prior years of talking with agencies about what their strategies were, how they have identified contracts, how they select contracts, and what the purposes of the specific contracts are.

Tom Temin
And interestingly, Homeland Security, which is one of those smaller spenders, had the highest percentage of dollars going to specified businesses. Whereas DoD, the biggest spender, had the among the smallest, only 6% going to designated.

Jessica Lucas-Judy
That was just one more way that you could slice and dice the data. And so when you looked at it by dollars, DoD, like you said was the biggest. When you look at it by percentage, NASA turned out to be the biggest, they had 99% of the contracts meant to specify businesses. But it’s a very small dollar amount overall. So again, one or two contracts, one way or the other, can really sway the difference.

Tom Temin
Sure, yeah. I’m trying to think why would NASA advertise at all. I guess, well, maybe jobs.

Jessica Lucas-Judy
Public awareness, recruitment, all those things.

Tom Temin
All right. Well, it looks like you didn’t have any recommendations with respect to ad spending.

Jessica Lucas-Judy
Yeah, this one, our purpose was just to look at the data to inform, answer questions, things like that. But we were not looking at any sort of compliance issues or things like that. There is some guidance out there for some of this, certainly the OMB and SBA, and other agencies are interested in, looking at where contracts go, and there’s some efforts to reach out specifically to make sure that small businesses, in particular, certain percentage of contracts, federal contracts overall. They’re awarded, but not specifically in advertising.

The post How the government spends a billion dollars a year on advertising first appeared on Federal News Network.

Conflicts of interest in federal contracting can happen in a lot of ways. In one tangled case, an award winner’s subcontractor turned out to have a conflict of interest. And it may have scuttled the deal. Haynes Boone Procurement Attorney Zach Prince joins the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin
This one’s a little bit convoluted, but you’re always good at sorting them out for us, Zach. This was a [Center for Medicare and Medicaid Services]  award for what to whom?

Zach Prince
So this was the third iteration of a CMS award. This was a protest by a company called the Square Group (ASG) of an award to its competitor Cogent. This award was for health insurance marketplace and financial management analytics. So analyzing data generated from other CMS contracts, among other things.

Tom Temin
All right. And it didn’t initially go to Cogent, it went to ASG first.

Zach Prince
That’s right. So ASG got this award in 2023. And then Cogent brought a protest at GAO. Before GAO got to a decision there, the agency took corrective action, held exchanges with Cogent and ASG, got revised quotations, and then decided that actually it was going to award to Cogent which had a substantially lower price. So at that point, ASG protested here at GAO.

Tom Temin
Yeah. And they had a lot of grounds. But there was only one that really kind of stuck and took them both through a long process.

Zach Prince
A lot of these protests, especially at GAO, you go in and you argue basically everything. As Judge Thompson said in one of his decisions from the Court of Federal Claims recently, “throw the throw spaghetti at the wall and hope something sticks.” That’s how a lot of protests go. This though, GAO was struck by the organizational conflict of interest (OCI) issue, and that ultimately is what it decided in favor of for ASG.

Tom Temin
Right, so now, nobody has the contract while CMS figures out what to do. But in this case, the organizational conflict of interest wasn’t with the main contractor, Cogent; it was with one of its subcontractors. Explain what was going on there.

Zach Prince
So there are a couple of categories of OCI. Organizational conflicts of interest can be impaired objectivity — which is what happened here — biased ground rules, or unequal access. So some of those are things that can be mitigated, usually impaired objectivity, which means basically, that you’re evaluating your own work from another contract. Can’t be mitigated, unless it’s a subcontractors issue, and then potentially the subcontractor can be firewalled off. That’s what the issue was here. A Cogent subcontractor, that it was having do quite a bit of the work apparently, had been running a separate contract for CMS supporting the federal exchanges, or healthcare.gov, where it was generating the data that it was then going to be validating under this new contract. Classic, classic impaired objectivity OCI; there was a proposed mitigation strategy. But on review, GAO decided that strategy just wasn’t enough.

Tom Temin
In other words, this subcontractor was going to be evaluating data that it itself generated, not in relation to its direct work for CMS, but in its work as a subcontractor to Cogent, which would have ended up in the same place.

Zach Prince
You can’t have a situation where you’re evaluating your own work, or where somebody who’s part of your team is evaluating its own work. It is, at least optically, a major problem where the agency should not be able to trust or can’t trust the independence of that assessment. And so they proposed a mitigation strategy. They said, ‘we’re going to take this up, and we’re going to firewall them off.’ So they’re not reviewing that one type of data, payment data, that was generated from the other contract. And the agency said, ‘okay, that’s good enough.’ But when GAO looked at this during the protests, they said, ‘hold on, there are several categories of data that are at issue here. There’s payment data, there’s enrollment data, there’s potentially other data, all of which are data that were generated by the subcontractor under the other contract. Your proposal for mitigation only dealt with one category, it didn’t deal with these other ones.’ So for the agency to have accepted the mitigation proposal as is, where it only dealt with one category that was irrational. And that was the basis to sustain the protest.

Tom Temin
We’re speaking with Zach Prince, he’s a partner at the law firm, Haynes Boone. Would the subcontractor have known about what’s going on, because it probably would have, because don’t subcontractors know when they’re part of a team that is bidding by the prime for a new contract?

Zach Prince
They absolutely should have known what’s going on. And the prime, Cogent, really should have known about this issue, too. The issue was brought to their attention during the evaluation also, by the technical evaluation, and that’s when they came up with this mitigation strategy. They didn’t reflect this mitigation strategy in their technical proposal, which by the way, they had a couple rounds of chances to provide a revised proposal. So they’ve got a technical proposal that says nothing about segregating these guys out. And in fact, they call for hundreds of hours of these guys’ time, the subcontractor’s time, doing valuation tasks. That was directly contrary to what they said in the mitigation plan. They just didn’t fix the issue when they had opportunity.

Tom Temin
Yeah, some things simply can’t be mitigated, in other words.

Zach Prince
It could have been mitigated if they did it early enough, if they came up with a way that this sub just wasn’t doing that work. Some things certainly can’t be. If the prime was the one who had generated this data that they’re then evaluating, you can’t mitigate it by firewalling yourself off, it’s too much of the work. Sometimes, if it’s a tiny part of the scope of work, maybe you can subcontract that as the prime, but most cases, you can’t. But in this case, it just wasn’t reflected in their technical proposal, which is another big issue GAO had with the agency’s conduct.

Tom Temin
Even if they could say, well, this subcontractor will continue to evaluate this data. But this particular sliver of data which they generate under this contract with us, they will not be. We’ll find somebody else to evaluate it. Even that doesn’t seem to totally mitigate it, because you still have this business relationship, and it just doesn’t sound clean no matter what you do in some cases.

Zach Prince
And I think it’s rational for the agency to determine that that is something that can’t be mitigated if that’s what they wanted to do. The finger is on the scale heavily for the agency, as long as it’s making a rational decision. The problem is here, they weren’t making a rational decision. It just wasn’t reflected in the technical proposal, which showed that, basically, if they did this mitigation, what they proposed was unworkable. And the mitigation itself just didn’t go far enough. Because it wasn’t just a sliver of data that was the problem. It was this wider set of data.

Tom Temin
And so now nobody has the contract. GAO just, I guess, invalidated it. What happens in these situations when you have too close bidders. One was better on price, but it has a conflict of interest. Can the agency say ‘okay, we’ll go back to the first company, Square Group?’

Zach Prince
The agency has got a couple of options. And the most outlandish option — this is definitely not happening — is the agency just says ‘we don’t care what GAO says.’ They don’t have to; GAO just makes recommendations. But if you don’t do what GAO says, then you’re going to end up in the Court of Federal Claims. And your agency is going to end up in front of Congress explaining why they chose to ignore GAO.

Tom Temin
Plus it could be two more years till you get any of the work done.

Zach Prince
Right. I mean, if they choose to ignore GAO, then they can just let Cogent keep going. And then they get the work done. And sometimes that happens in really sensitive procurements. But it is really rare. They could also go back now and say, ‘let’s reopen discussions. And we’ll get a new proposal from Cogent, we’ll get a new proposal from ASG. ASG will probably give us a much better price. Cogent will give us a different technical proposal that deals with this issue.’ And then they reevaluate at that point. That’s the more complicated way to do it. I’m not sure right now, how the work’s getting done. Maybe there’s a bridge contract from the incumbent. I think this probably is ASG continuing to perform because I think they were the incumbent, so maybe the agency goes that route.

Tom Temin
All right, so we could call this one be fair or be square. Pun intended.

The post Why bidders for federal contracts need to deal with conflicts of interest early on first appeared on Federal News Network.