Federal Contracting

Revisiting the $16 Muffin


Washington has plenty of problems to tackle these days—unemployment, the debt, and disaster relief among them. Now comes another toughie: calculating the proper price of a muffin.

The muffin mini-scandal began in late September as a tantalizing line in a government report: The Justice Dept.’s Inspector General found that at a 2009 conference for immigration lawyers held at the Capital Hilton in Washington, attendees were served muffins—for which taxpayers were billed $16.80 apiece. Over the course of the five-day conference, the report said, the total muffin bill added up to a whopping $4,200.

Word of the $16 muffin ricocheted around the Internet. A grim-faced Joe Biden called for an immediate change to the government’s procurement practices. He ordered all government agencies to review conference spending and said a deputy secretary should personally approve such expenses while the review is under way. Like the Defense Dept.’s infamous $600 hammer, the $16 muffin triggered people’s reflexive anger at Washington’s incompetence and the government’s seemingly willful misuse of taxpayer dollars.

Except it turns out the story wasn’t quite right. Hilton Worldwide fired back, claiming that $16 was in fact the price for a continental breakfast, complete with coffee, fruit, and juice. In a letter to Senator Barbara Mikulski (D–Md.)—who had called for an explanation—Justice Dept. officials wrote that if their accusers had examined all the receipts they would have found the actual price was $14.29 per person per day, and included breakfast and rental fees for the workshop space and conference rooms.

Not a bad deal at all, especially in downtown Washington. “If you’re talking D.C., you certainly can’t have any basic continental breakfast for $16,” says Krista Minitelli, president of Hudson Event Group, which plans conferences around the country. “A very basic breakfast is at least $25—and they just have bread and coffee, maybe fruit. In New York, a continental breakfast is in the thirties.” Minitelli called the prices cited in the government audit—including $1 per ounce for hotel coffee—“absolutely standard.” In a statement to Bloomberg Businessweek on Tuesday, the chastened Inspector General’s office conceded that it might not have been in possession of all the facts. “Since our report was issued, the Capital Hilton has stated that other food and beverage items, such as coffee, tea, and fruit, were included in the charged amount.”

Amusing as it was to watch bureaucrats tussle over who was the more ardent protector of the public trust, the incident did unearth a curious if not quite urgent question: Just how far does the government go to make sure it’s getting a good deal on muffins and coffee? We are, after all, talking about a lot coffee and a lot of muffins. From 2008-2009 the Justice Dept. alone hosted 1,832 conferences, for a total cost of $121 million.

At least on paper, public employees are bound by an abstruse set of rules that govern even the smallest expenses and actually make you feel kind of sorry for the government’s muffin procurement officers. No, they aren’t called that, but most federal agencies do have employees dedicated to overseeing conference spending and contracts. Their bible is the Federal Travel Regulation (FTR) 41 Code of Federal Regulations (CFR) Chapter 300-304 Conference Planning (Subchapter D). Essentially, it says they have to call around to get an idea of the going rate in the area and then put out a request for bids, allowing conference centers and caterers to compete to provide their services for the lowest price.

So did the Justice Dept.’s conference planners follow all these steps when they were putting together the muffin meeting? Department officials, who refused to be named or quoted, would say only that that’s what they were supposed to do. In Washington, where government contracts are big business and agencies hold hundreds of meetings a year, the process can be a lot less formal. Hotels and caterers know what the government is willing to pay and often offer lower prices to get its business.

But not always. Muffins aside, the IG’s report points up other instances where the Justice Dept. overpaid for sweet treats. At a 2009 Justice conference in San Francisco, the government was billed $32 per person for a snack of popcorn, Cracker Jack, and candy bars. Department officials didn’t jump up to dispute that part of the audit. Says Gina Talamona, a Justice spokeswoman: “We agree that excessive spending of the types identified in the OIG report should not occur.”

The bottom line: A mountain of treats can get pricey. In 2008-2009, the Justice Dept. alone held 1,832 conferences costing a total of $121 million.

Dwoskin is a staff writer for Bloomberg Businessweek in Washington. Follow her on Twitter: @lizzadwoskin.

Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus