The Troubled Assets Relief Program (TARP) may have expired at the beginning of the month, but the Congressional Oversight Panel--which was tasked with serving as a congressional watchdog over Treasury action--still has work to do.  The latest monthly COP report focusses on Treasury's use of outside contractors in administering TARP.  The practice comes under scrutiny largely because it may limit the degree to which the Treasury's actions are transparent to the general public (this is not the first time COP has shared concern about transparency issues).  From the report:

In general, Treasury has taken significant steps to ensure that it has used private contractors appropriately, and indeed some experts have praised Treasury for going above and beyond the usual standards for government contracting. Treasury provided for competitive bidding for most of its contracts, and it has established several layers of controls to monitor contractor performance and to prevent conflicts of interest. Further, despite the pressing needs of the financial crisis, Treasury complied with the FAR, although it could have waived its provisions.

This praise must be viewed in context, however. The government contracting process is notoriously nontransparent, and although Treasury appears to have performed well on a comparative basis, significant transparency concerns remain. For example, contractors and agents are immune to requests under the Freedom of Information Act. Contractors may hire subcontractors, and those subcontracts are not disclosed to the public. Important aspects of a contractor‟s work may be buried in work orders that are never published in any form. Further, Treasury publishes no information on the performance of contractors during the life of thecontract. In short, as work moves farther and farther from Treasury‟s direct control, it becomes less and less transparent and thus impedes accountability.

The contracting process has also created confusion about the role of small businesses in administering the TARP. In one case, Treasury awarded a contract to a “small disadvantaged business,” which in turn delegated roughly 80 percent of the contract to a “large business.” Thus, although on the surface it appears that the contract is being performed by a small business, in actuality a large business is essentially responsible for performance. Additionally, the Panel is concerned by the lack of outreach by Treasury to find qualified minority-owned businesses to participate in the TARP. Although several minority-owned businesses have received TARP financial agency agreements, only one prime TARP contract has been awarded to a minority- owned business.

Here is new COP Chair Sen. Ted Kaufman (D-DE), summarizing the report:

Read the COP October report, in full, here.