It’s an essential tenant of the neo-conservative faith that government can’t do anything as well as the private sector.
So why has federal funding soared as the Bush administration has increased the dollar amount of federal contracts from $207 billion in 2000 to about $400 billion last year? Ironically when the General Services Administration found themselves needing people to investigate cases of incompetence and fraud by federal contractors, agency officials found such a large workload that they – wait for it – had to hire an outside contractor themselves.
The company they choose, CACI International had narrowly avoided a suspension from federal contracting. Far from saving money, each person supplied by CACI would cost taxpayers a staggering $104 an hour.
Here are the various weaknesses of the rush to privatize government functions:
¶Competition, intended to produce savings, appears to have sharply eroded. An analysis by The New York Times shows that fewer than half of all "contract actions" — new contracts and payments against existing contracts — are now subject to full and open competition. Just 48 percent were competitive in 2005, down from 79 percent in 2001.
¶The most secret and politically delicate government jobs, like intelligence collection and budget preparation, are increasingly contracted out, despite regulations forbidding the outsourcing of "inherently governmental" work. Scott Amey, general counsel at the Project on Government Oversight, a watchdog group, said allowing CACI workers to review other contractors captured in microcosm "a government that’s run by corporations."
¶Agencies are crippled in their ability to seek low prices, supervise contractors and intervene when work goes off course because the number of government workers overseeing contracts has remained level as spending has shot up. One federal contractor explained candidly in a conference call with industry analysts last May that "one of the side benefits of the contracting officers being so overwhelmed" was that existing contracts were extended rather than put up for new competitive bidding.
¶The most successful contractors are not necessarily those doing the best work, but those who have mastered the special skill of selling to Uncle Sam. The top 20 service contractors have spent nearly $300 million since 2000 on lobbying and have donated $23 million to political campaigns. "We’ve created huge behemoths that are doing 90 or 95 percent of their business with the government," said Peter W. Singer, who wrote a book on military outsourcing. "They’re not really companies, they’re quasi agencies." Indeed, the biggest federal contractor, Lockheed Martin, which has spent $53 million on lobbying and $6 million on donations since 2000, gets more federal money each year than the Departments of Justice or Energy.
¶Contracting almost always leads to less public scrutiny, as government programs are hidden behind closed corporate doors. Companies, unlike agencies, are not subject to the Freedom of Information Act. (From the New York Times, Sunday, February 4, 2007. Article entitled In Washington, Contractors Take On Biggest Role Ever.)
David Walker, who heads the Government Accountability Office, sums up the problem simply:
"There’s something civil servants have that the private sector doesn’t," Mr. Walker said in an interview. "And that is the duty of loyalty to the greater good — the duty of loyalty to the collective best interest of all rather than the interest of a few. Companies have duties of loyalty to their shareholders, not to the country." (From the New York Times, Sunday, February 4, 2007. Article entitled In Washington, Contractors Take On Biggest Role Ever.)
There is something very disturbing about private organizations performing jobs that once were exclusively the province of the federal government. At a certain point, one has to concluded that it’s not about red, white and blue.
In too many cases it’s all about the green.