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More on that Interior Department, Minerals Management Service contract that MZM received in 2002 that I wrote about yesterday. MZM is the defense and intelligence contracting firm headed by confessed Duke Cunningham co-conspirator Mitchell Wade. The October 15 2002 contract I found yesterday appears to be the first of some more than $100 million in federal contracts Wade's MZM subsequently received from the federal government. A few people who know something about this world have written to explain what might be going on here. They suggest it may have little to do with the Interior Department, but disguise a contract for another agency.
One reader writes, "...MMS began operating a 'franchise fund' in the late '90s as a means of raising extra revenue that it could keep. The concept is classic good government - an agency with a particular area of administrative expertise and competence provides the expert service to other agencies in need of it with a small fee tacked on for its services. So basically MMS became kind of a freelance acquisition service - just tell us what you want and we will efficiently make sure you get it, no questions asked, for a small fee. Lots of agencies have taken advantage of this service, which is generally regarded as very effective and efficient, and good value for the money. One can see why, aside from all the usual good government reasons, there could (theoretically) be reasons why some agency might not want to award a contract directly and have them in its records. It might be useful to have it awarded by MMS, or some similar middleman service, so that it was not so transparent."
A second reader "When I worked [in a federal government agency during the Clinton administration], I learned from a contractor about an entrepreneurial chap in Interior who had made it very easy to contract work out without the usual complex procurement steps. This is the office that was used by The White House to get money to MZM. The strategy was to use the office to make a small contract, then use that contract as a justification for a sole-source contract through one's own agency. (It is not at all uncommon for agencies to pass money through one another...) You might also be surprised at how hard it is (or was) for the WH to contract directly. The usual means is to try to find a cabinet agency with a contract that is open enough in scope that it can fund whatever the WH wants, then to borrow the contractor's services or use the contractor to pass money through to someone else. If there is a way, you need to follow the money back from Interior. Was it originally Interior money or was it passed through from a WH fund or perhaps Defense? [...] It would be the rare contractor, however, who would not have learned about the Interior pipeline."
So who arranged for MZM to get that first $25,000 contract via the Interior Department's innovative franchise outfit, that opened the door to the hundred million dollars in the other contracts? One hint. The next contract MZM received was just three days later from the Defense Department's own IT contracting unit, DITCO, and while it was for only roughly half a million dollars, it was swiftly followed by two contracts for several million dollars. I believe those came from the Army National Ground Intelligence Center in Charlottesville, Virginia, whose director's son was hired by MZM, one of many NGIC officials and relatives hired by the company.