Welch, Obama push contract overhaul

By DANIEL BARLOW Vermont Press Bureau - Published: March 5, 2009

MONTPELIER – Last year, U.S. Rep. Peter Welch opposed the president in pushing to close a loophole in federal law that allowed U.S. contractors overseas to hide fraud, waste and abuse.

On Wednesday, the Vermont Democrat stood side-by-side with the president as that policy was announced as the new government contract accounting standard.

"What President Obama had to say today was good news," Welch said early Wednesday afternoon. "This is long overdue."

Welch was one of a handful of lawmakers who joined Obama at a White House press conference announcing a major overhaul of how the government tracks contracts and watches for reports of abuse and fraud.

The new regulations end one of the financial hallmarks of President Bush's administration: Large, multi-million dollar government contracts awarded without proper bidding to companies with ties to the White House.

Welch, a member of the House Government Oversight Committee, said he got interested in the topic during hearings on contracts for services in Iraq, including allegations that companies such as Halliburton – which has strong ties for former Vice President Dick Cheney – was ripping off American taxpayers.

"We saw e-mails showing this abuse," Welch explained. "If a truck had a broken tire rod, the company would simply buy a new $80,000 vehicle. And this was taxpayer's money."

He was also shocked to find out that the White House helped create a loophole allowing companies working outside of the United States to hide accusations of waste, fraud or abuse of government contracts.

Welch later won support for a measure closing that loophole via a defense spending plan passed by the U.S. Congress and signed into law by President Bush last summer. Welch said Obama's announcement Wednesday takes that reform a step further.

"Never in a million years would we tolerate this in Vermont," Welch said. "There would be a bipartisan call to investigate."

Obama's new contracting rule forbids the awarding of no bid contracts and will enhance oversight of how successful the work is carried out, Welch said. This regulation will extend to the nearly $900 billion economic stimulus plan passed into law last month.

Obama thanked Welch for his work on this issue during the press conference Wednesday