The Privatization of Government
Today's NY Times has a real blockbuster of an article. Written by Scott Shane and Ron Nixon, the article explores the ballooning use of private contractors to perform governmental duties. Most of us are aware of the use of no-bid contractors for much of what is going on in Iraq and in the post-Katrina Gulf Coast reconstruction, but I was flabbergasted to learn how much domestic, purely governmental work that private contractors are now doing. We now even hire contractors to oversee the other contractors' work. How scary is that?
Conservatives have long complained that the federal government is wasteful and inefficient because it isn't run like a business. Now we have a government that is pretty well run by businesses, and there doesn't seem to be any appreciable difference in either waste management or efficiency. Here's what Shane and Nixon have to say about that:
Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government. On the rise for decades, spending on federal contracts has soared during the Bush administration, to about $400 billion last year from $207 billion in 2000, fueled by the war in Iraq, domestic security and Hurricane Katrina, but also by a philosophy that encourages outsourcing almost everything government does. ...
The contracting explosion raises questions about propriety, cost and accountability that have long troubled watchdog groups and are coming under scrutiny from the Democratic majority in Congress. While flagrant cases of fraud and waste make headlines, concerns go beyond outright wrongdoing. Among them:
¶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. Members of Congress have sought unsuccessfully for two years to get the Army to explain the contracts for Blackwater USA security officers in Iraq, which involved several costly layers of subcontractors. [Emphasis added]
And this is surprising?
Government and business operate under different models. The latter is in the business of doing business, of making a profit for its sharefholders. The former is an entity that is charged with providing services to all of the people.
David M. Walker, who as comptroller general of the United States leads the Government Accountability Office, has urged Congress to take a hard look at the proper limits of contracting. Mr. Walker has not taken a stand against contractors — his agency is also dependent on them, he admits — but he says they often fail to deliver the promised efficiency and savings. Private companies cannot be expected to look out for taxpayers’ interests, he said.
“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.”
It's time to take the government back, and I suspect that Congressman Henry Waxman is going to provide us with a good start in that direction.
Conservatives have long complained that the federal government is wasteful and inefficient because it isn't run like a business. Now we have a government that is pretty well run by businesses, and there doesn't seem to be any appreciable difference in either waste management or efficiency. Here's what Shane and Nixon have to say about that:
Without a public debate or formal policy decision, contractors have become a virtual fourth branch of government. On the rise for decades, spending on federal contracts has soared during the Bush administration, to about $400 billion last year from $207 billion in 2000, fueled by the war in Iraq, domestic security and Hurricane Katrina, but also by a philosophy that encourages outsourcing almost everything government does. ...
The contracting explosion raises questions about propriety, cost and accountability that have long troubled watchdog groups and are coming under scrutiny from the Democratic majority in Congress. While flagrant cases of fraud and waste make headlines, concerns go beyond outright wrongdoing. Among them:
¶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. Members of Congress have sought unsuccessfully for two years to get the Army to explain the contracts for Blackwater USA security officers in Iraq, which involved several costly layers of subcontractors. [Emphasis added]
And this is surprising?
Government and business operate under different models. The latter is in the business of doing business, of making a profit for its sharefholders. The former is an entity that is charged with providing services to all of the people.
David M. Walker, who as comptroller general of the United States leads the Government Accountability Office, has urged Congress to take a hard look at the proper limits of contracting. Mr. Walker has not taken a stand against contractors — his agency is also dependent on them, he admits — but he says they often fail to deliver the promised efficiency and savings. Private companies cannot be expected to look out for taxpayers’ interests, he said.
“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.”
It's time to take the government back, and I suspect that Congressman Henry Waxman is going to provide us with a good start in that direction.
Labels: Government Contractors
posted by Diane at 9:02 AM
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