Your Taxpayer Dollar$ at Work: Volume III – Muffin Edition

This week’s news of the absurdity of waste, fraud, and abuse across government comes from the Department of Justice (DOJ) Office of the Inspector General (OIG) Audit Division. Their report, titled Audit of Department of Justice Conference Planning and Food and Beverage Costs is a follow-up to a previous September 2007 which examined expenditures for 10 major DOJ conferences held between October 2004 and September 2006. That audit found that DOJ had few internal controls to limit the expense of conference planning and food and beverage costs at DOJ conferences. This report highlights the same story, and little to no corrective actions by DOJ to mitigate this waste. Makes you think fondly of the $50 hammers and $500 toilet seats of Defense back in the 80s, doesn’t it?

Of course politicians and the media jumped on the story for easy press, zeroing in on the $16 muffins and nearly $10 cookies served to attendees at one event. Emily Ingram of the Washington Post created a good competitive landscape of the muffin offerings in Washington, and only at government conferences will those prices apply. What is even worse is that DOJ officials basically stated they thought they were addressing the issue:

…Justice officials did not dispute most of the findings. The department did not offer an official to speak by name, but a spokeswoman who was not authorized to comment publicly said the agency “agrees that excessive spending of the types identified in the report should not occur” and has taken steps to prevent it. She said conference costs have been cut this year as part of an effort to curtail non­essential spending, though she could not specify an amount.

Justice Department officials gave auditors a variety of explanations for the expenses, saying consultants they hired to help plan events had valuable knowledge and that the department had done its best to control costs. Officials from one Justice office said they thought they were saving money by serving muffins and other snacks instead of full meals…

You’re not saving money DOJ, you’re wasting it needlessly.

The OIG recommendations are pretty straight forward: itemize costs and ensure you have adequate price analysis to ensure “best value.” These controls need to go much further by commoditizing these expenditures, of course itemizing all costs (both direct and indirect), and ensure no surprises and real best-value. There are many other quality, yet reasonable, venues that can accommodate these functions other than the Ritz Carlton.

Adequate market research must be conducted, lessons learned applied, and opportunities for strategic sourcing and leveraging the buying power of the government must be utilized. Further, perhaps this is an opportunity to consolidate BPAs across government and further leverage buying power, in addition to possible using reverse auctions to drive down prices. Cost savings of these types of expenditures are really low-hanging fruit, akin to eliminating free coffee or soda in the break room, which makes this report even more shocking at the level of waste rampant in government.

We obviously have a long way to go in reducing spending, although a thorough spend analysis of these commodity-type of expenditures could probably find millions, if not billions, in needless waste and efficiencies. The opportunities to save money are everywhere. Just look in the snack basket apparently.

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Julie Chase

Hiring consultants was your first mistake. Geez louise, you contracted out to plan a conference? Then the contractor (consultant) was left to their whim? No wonder the taxpayers and other gov workers (like me) are ticked off. When a gov worker down in my small pond hears the word “contractor”, it’s like fingernails running down a chalkboard. Same with “consultant”. I am sure there are many civil service workers who work “protocol” and set up conferences all the time, since there are alot of military brass there. Why not “consult” with them? Here we are buying our own desk calendars or making them off MS Word, purchasing a good chunk of our supplies from AbilityOne/Skilcraft and everyone in DC is kicking up their heels. Do you know what our Training/Conference budget is for FY12? Near nothing, as most guests/speakers/trainers are coming to us. I have been working for the gov for 10 yrs and I have never been to any travel/training/conference where I was served anything to eat. Somehow, I got through it, Lord I don’t know how. <sigh> Did anyone forget to tell DOJ there is a war on? While you all are diining on $16.00 muffins, our men and women are sleeping on sand. Somehow Department of Justice is an oxymoron.

Jaime Gracia

My concern is the knee jerk reaction that seems to be gaining steam from the Administration on turning the screws even further on training and travel, at a critical juncture where training, specifically with the acquisition workforce, is a critical function.

At the conference and training seminars that I conduct, I have always not provided food or snacks, as it an unnecessary expense. Anyway, it is cheaper to buy these items in the cafeteria since I am usually on site at an agency or training facility. Nice to haves drive up price, and add no value.

Julie Chase

Jaime, I agree about acquisition workforce. It would be great to have someone come to our acquisition/contracting dept inviting all the admins in other depts, who write PR’s over the micro threshold as well as the IT folks as they screen every PR purchase, (doesn’t matter if it’s boxes of paper) as they are making sure IT isn’t sneaking in. I believe acquistion should be local to the dept/organization in which you work, vs. regional, where folks you don’t know, and don’t have any understanding of your mission are handling my purchases. There is a push to go regional and I think that is a big mistake, as I have experienced it with IT acquistions and the time it takes and the mountain of paperwork surely isn’t a cost savings. I don’t need someone 2 or 3 states away getting to my order whenever it’s convienent. The contracting dept at my installation is great, they know each organizations mission and have a handle on our needs. If it ain’t broke, don’t fix it. Moving into the 21st century with MFD, vs. the old fax machine would be a blessing.

Jaime Gracia

Julie – Although I see the power of geographic co-location, the regional model seems to be attracting more attention by agencies. This is the same business model used by the airlines, with their hub and spoke design. The important think that you point out is the communication between the functional and technical representatives, and that is critical for proper stakeholder analysis, vetting requirements, and improved outcomes.

I have seen the hub/spoke model work for procurement shops, but it requires dedicated effort by both program managers and contracting officers to have great relationships and be business advisors/partners, as opposed to the current, and prevalent, model of creating PRs and requirements in a vacuum then tossing the package over the wall to contracting without coordination or any communication. The Integrated Product Team (IPT) model of coordination and communications that you have is a the way to go, so it should be standardized across the organization such that location does not matter.