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GAO's Former Top Lawyer Grabs the Ax as Contract Chief
The National Law Journal
Daniel Gordon may be the most powerful lawyer you've never heard of.
As the newly confirmed head of the Office of Federal Procurement Policy (OFPP), Gordon is charged with overseeing how the government spends a staggering $530 billion a year on outside contractors. The Obama administration has made the usually low-profile area a priority, embarking on major changes in contracting policy and setting a formidable goal: cut procurement spending 7% by the end of fiscal year 2011.
If reducing contracting costs by roughly $37 billion wasn't challenge enough, Gordon must also rally an understaffed office that has been tarnished by ancillary scandals.
The previous head, Paul Denett, resigned in 2008 after his wife was accused of manipulating an Interior Department contract to steer work to a friend. Denett's predecessor, David Safavian, who headed the office from 2004 to 2005, was sentenced to a year in prison in October in connection with the investigation into the activities of ex-lobbyist Jack Abramoff.
"OFPP suffered badly under the Bush administration," said Steve Kelman, a professor at Harvard's Kennedy School of Government who led the procurement office from 1993 to 1997. "The stature of the office has declined."
Against this backdrop, Gordon, 58, a longtime civil servant, is described by those who know him as a veritable man on a white horse, galloping in to set things right. "A wonderful choice." "Kind and considerate." "Very smart, very knowledgeable." "Not a mean bone in his body." "Tremendously well-qualified." "Extraordinarily bright." The chorus of praise, both personal and professional, from lawyers in the government contracts bar is effusive. Even Sen. Joseph Lieberman (I-Conn.), at Gordon's Nov. 10 confirmation hearing, called him "one of the most broadly supported, noncontroversial" nominees to come before the Senate Committee on Homeland Security and Governmental Affairs.
Whether Gordon can live up to such high expectations remains to be seen, for he is in the potentially difficult position of implementing major policy changes that he had no hand in shaping. "The Obama administration has already come up with a road map, and he's inherited that, so to some extent his hands may be tied," said Scott Amey, general counsel of the Project on Government Oversight.
Cutting contract spending 7% in the next 22 months is "going to be very difficult," added Robert Burton, who spent seven years in the procurement office, serving as deputy administrator (the top civil service procurement job in the government) before joining Venable in Washington as a partner in 2008. "That means 'immediately' in government terms.
"The only way it's achievable is through very aggressive in-sourcing," he continued. That is, taking jobs currently performed by contractors and replacing them with government workers. "The goal is just to reduce procurement spending — not to save money overall," Burton said.
Such a move has political dimensions as well, since federal employee labor unions strongly support in-sourcing. But it raises some fundamental — and tricky — questions in government contracting law. How do you decide what jobs are appropriate to outsource, and which ones should be performed by public servants?
Gordon declined to be interviewed in person for this article but did answer questions posed by e-mail. "The line between inherently governmental activities that should not be outsourced and work that may properly be subject to private sector competition has been blurred and inadequately defined," he wrote. "I recognize that this is a complex area, and one that many people have struggled with over the decades. One of our top priorities is to provide clearer guidance about what work must be reserved for federal employees."
The Bush administration pushed heavily to outsource jobs to the private sector, said Joseph West, a Washington partner at Gibson, Dunn & Crutcher, but "the government's concern now is that there are way too many contractors performing pure governmental functions." These might include contractors providing security at embassies in combat zones, conducting clandestine raids or overseeing other contractors. "We're at the point now where the government has lost control of policies and programs," said Amey of the Project on Government Oversight.
Gordon, at least in part, would seem to agree. "Overreliance on contractors is a very real problem that this Administration has begun to address, and I want to do what I can to help," he wrote.
Two Decades of Contracting
A 1986 Harvard Law School graduate, Gordon clerked at the U.S. Court of Appeals for the D.C. Circuit. He was hired as a government contracts associate in 1987 by the Washington office of New York-based Fried, Frank, Harris, Shriver & Jacobson, where he worked for partner James McCullough.
McCullough recalls him as "one of our best associates ever" and said he was particularly skilled at "helping clients find the right way forward. We were very sorry to lose him."
In 1992, Gordon moved to the procurement law division of the General Accounting Office (renamed the Government Accountability Office in 2004), where he rose steadily through the career ranks. His primary work involved adjudicating bid protests, which in a 2006 law journal article he argued bring an "important measure of transparency and accountability to public procurement systems." When President Barack Obama nominated him for the job in October, Gordon was serving as the GAO's acting general counsel.
The procurement office is a tiny part of the Office of Management and Budget, with just more than a dozen employees. Yet its mission is huge. The office is charged with providing "overall direction to shape the government's procurement regulations," according to its Web site, with the authority to issue policy letters that are binding on all agencies.
The office became a backwater during the Bush administration, government contract lawyers say, with its leaders chosen more for their political connections than procurement knowledge. "It was all about political payback," said Karen Manos, a government contracts partner at Gibson Dunn in Washington who identifies herself as a Republican. "I can't remember anything significant happening the entire Bush administration."
Bush's first appointment was Angela Styles, a fellow Texan who is now a partner at Washington-based Crowell & Moring. But when she landed the job, she was just seven years out of law school and was virtually unknown in the procurement community. Styles did not return a call seeking comment.
She was followed by David Safavian. He was appointed in 2004, after serving as chief of staff at the General Services Administration. While at GSA, Safavian went on a luxury golf trip to Scotland with Abramoff. Around the same time, he allegedly aided the lobbyist with business before the GSA, then made false statements in an attempt to conceal this.
Safavian was not faulted for any wrongdoing while at the procurement office but spent his tenure there under a cloud of investigation in connection with Abramoff.
In 2006, a jury found him guilty of obstruction of justice and making false statements, but the verdicts were later vacated by the D.C. Circuit. Safavian was retried and found guilty of the same charges in December 2008. His one-year prison sentence has been delayed until his wife gives birth to their second child.
After Safavian came Paul Denett, who had senior-level procurement experience at the Department of the Interior, as well as in the private sector. Described as media-shy and low-profile, Denett resigned on Sept. 2, 2008. Two days later, the inspector general of the Department of the Interior issued a report about his wife, Lucy Denett, then associate director of Minerals Revenue Management at the Minerals Management Service.
In the report, which reads like a textbook case of how not to handle a contract, Lucy Denett is faulted for personally orchestrating the creation of a $450,000 consulting contract with her former special assistant. The assistant drafted key portions of the contract before he quit, and Denett sat on the committee that awarded the contract to him.
The case was referred to the Department of Justice, which to date has elected not to prosecute her, although her assistant pleaded guilty to a felony violation of the conflict of interest law. Paul Denett did not return a call placed to his home in Northern Virginia.
Government contract lawyers have high hopes that Gordon will usher in a new era. "OFPP has not played a leadership role in policy or regulation in the last administration," said McKenna Long & Aldridge senior counsel C. Stanley Dees, who is often called the dean of the contracting bar. "I think that will change with Dan Gordon."
Jenna Greene can be contacted at firstname.lastname@example.org.