State Dept’s Made in the USA Glass Stemware Makes News on Shutdown Week

— By Domani Spero

In April 2010, this made the news: Not Made in the USA Glass Stemware Causes Not-So-Diplomatic Protest.  This week, the glass stemware controversy returned for another news splash.  The Cable reports that the State Dept Defends Its $5 Million Order for Hand-Crafted Glassware.

Apparently, according to The Cable, Congress is asking the State Department for specifics about a recent $5 million contract for handcrafted glasses for use in embassies around the world.

The order with a potential five-year contract covers “20 different styles of custom handcrafted stem and barware from the Vermont-based glassblowing company Simon Pearce.”  The Daily Mail says this includes 12,000 pieces of stemware for American embassies from a company that makes hand blown crystal that retails for up to $85-per-wine glass. Even the Wine Spectator covered the need for quality stemware here.

Below is an excerpt from Valley News on how this contract was “re-competed”:

Vermont Sen. Patrick Leahy, who is the chairman of the Senate Appropriations Subcommittee on State, Foreign Operations and Related Agencies, which oversees State Department funding, was instrumental in helping Simon Pearce get the contract. Leahy wrote to Secretary of State John Kerry in support of the bid by Simon Pearce, a news release says.

“It is wonderful to have such an exquisite example of Vermont craftsmanship on display and in use in our embassies around the world,” Leahy said in the release. “Marcelle and I have visited many of those embassies, and knowing that Simon Pearce’s products will be there is something that all Vermonters should be proud of,” Leahy said.

A State Department official, speaking on background, told The Cable that neither the order nor the timing is unusual:  “It’s not unusual for lots of contracts to be awarded by the end of the fiscal year.” 

The Cable quotes one Hill aide who was less than happy with this contract. “Seems like a poor use of funds given the current budget environment.” 

Aah! Aah! Aah!  Wanna bet that the Hill aide was not Senator Leahy’s. Okay.

Today is Day 11 of the shutdown but just a couple of weeks ago was “use it or lose it” week. In many cases, agencies must spend all their allotted funds by September 30, the end of the fiscal year.  If they don’t, they lose the money, or Congress could cut short their future funding.  So agencies are certainly incentivized to spend.  Jeffrey B. Liebman and Neale Mahoney who did a 2010 paper on Do Expiring Budgets Lead to Wasteful Year-End Spending? noted that “spending spikes in all major federal agencies during the 52nd week of the year as the agencies rush to exhaust expiring budget authority.”

Apparently, some contractors even make 25% of their annual business on that 52nd week alone.  The last week of September — AKA: the end-of-year spending binge, the Flush, or just Christmas in September.

If you think State is the only one doing this, get ready for a booo!

WaPo details some of the end of year binges in late September:

  • The Department of Veterans Affairs bought $562,000 worth of artwork.
  • The Agriculture Department spent $144,000 on toner cartridges.
  • The Coast Guard spent $178,000 on “Cubicle Furniture Rehab.”

According to Feds here, government offices in their equivalent of shop till you drop week, bought three years worth of staples. What the what?  One office purchased 10 portable generators “that just sit there.” One department reportedly bought some flat screen TVs “which are not used, just big shiny black wall decorations.”

One from the National Guard said, “We had to go to the range every year to expend all of our remaining ammunition. It was fun for a while, but we were firing so much that it became tedious. When you get BORED from shooting MACHINE GUNS, there is a problem.”

The Washington Times reported that in the waning months of the 2012 fiscal year, the Navy paid $51,000 for clarinets and $21,000 for an organ. The Army spent $40,000 on violins. And the Army National Guard reportedly bought $18,000 worth of coffee mugs for recruitment.

This year, we saw some more interesting purchases in kind and volume during the last week of September.  The U.S. Navy spent $135,330.67 for book and overhead scanners. The U.S. Army spent $16,597.46 for kettlebells. The Department of Veterans Affairs spent $48,953.58 on trash cans. The Department of Homeland Security used $213,879.72 to leased copiers.

And oh, the U.S. Army spent $4,152,000.00 to purchase GUNS, OVER 30MM UP TO 75MM.

Perhaps the more interesting purchases are $50,937.3 for an E-1 Between US Embassy, Paris, France and Elysee Palace, Paris, France by the Defense Information Systems Agency and $409,305.47 for a Catholic Priest by the Department of the Army, a firm-fixed-priced contract with a base period of one year beginning 1 October 2013 plus four one-year option periods.

Surprised? Me, too.

Anyway, it has been suggested even by the Feds that agencies be allowed to roll over their funds for next year’s funding. But the Liebman-Mahoney paper suggests that “even with rollover authority, there remain incentives for agencies to use up their full allocation of funding. Large balances carried over from one period to another are likely to be interpreted by OMB and Congressional appropriators as a signal that budget resources are excessive and lead to reduced budgets in subsequent periods.”

Given that Continuing Resolutions have now become the norm rather than the exception,  the propensity to hoard funds or to shop till you drop when funds are available is not going to get any better.  The solution might be to regularized funding and not to penalized agencies when they are unable to spend all their allocated funds.

But what do we know.  That’s the way it’s been for a long time now.  And since Congress is busy with some CC or Continuing Craziness of their own making, we are not hopeful that they will find a solution that works soon. For now, the Hill aide can continue being “less than enthused” because obviously there’s no fault in the Congress’ stars.