Outsourcing the war, and a lot more...

With clear ideological motives, the Bush administration has assumed from its first inauguration that there's nothing the private sector can't do better than the federal government—the Enron debacle notwithstanding—including waging war.

Not surprisingly, the fastest growth in discretionary federal spending in this decade has been in private contracting. From 2000 to 2005, government contracting increased by 86% (see graph on left). During this period, there has been an increase of $175 billion in spending on private procurements, much of it without adequate accounting controls or meaningful congressional oversight.

Last week's hearings by the House Committee on Oversight and Congressional Reform were a sequel to its detailed report (1) last summer on the growth and misuse of private contracting. That report was an attempt to overcome years of congressional neglect in addressing the issue.

The report found:

• "...118 federal contracts worth $745.5 billion that have been found by government officials to include significant waste, fraud, abuse, or mismanagement. Each of the Bush Administration’s three signature initiatives — homeland security, the war and reconstruction in Iraq, and Hurricane Katrina recovery — has been characterized by wasteful contract spending."
• "The growth in federal contracts has been accompanied by pervasive mismanagement. Mistakes have been made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight to recovery of contract overcharges."
• "Federal procurement spending is highly concentrated on a few large contractors, with the five largest federal contractors receiving over 20% of the contract dollars awarded in 2005. Last year, the largest federal contractor, Lockheed Martin, received contracts worth more than the total combined budgets of the Department of Commerce, the Department of the Interior, the Small Business Administration, and the U.S. Congress."
• "The fastest growing contractor under the Bush Administration has been Halliburton. Federal spending on Halliburton contracts increased over 600% between 2000 and 2005."
• Halliburton's contract with the Department of the Army, through which its KBR subsidiary received $14,837,888,997, was deeply flawed due to "lack of competition," "mismanagement" and "wasteful spending."
• "In the case of each of these 118 [problem] contracts, reports from GAO, the Defense Contract Audit Agency, agency inspectors general, or other government officials have linked the contract to major problems in costs, administration, or performance."
• "The value of sole-source and other noncompetitive contracts [see graph below] awarded by the Bush Administration has increased at an even faster rate than overall procurement spending, rising by 115% from $67.5 billion in 2000 to $145 billion in 2005. As a result, 38% of federal contract dollars were awarded in 2005 without full and open competition, a significant percentage increase from 2000."
• "There is no single reason for the rising waste, fraud, and abuse in federal contracting. Multiple causes — including poor planning, noncompetitive awards, abuse of contract flexibilities, inadequate oversight, and corruption — have all played a part."

In a not-unrelated development, the Bush administration is proceeding with its plan to privatize portions of our national forests on a grand scale: 300,000 acres in 35 states. It also proposes to slash the Forest Service budget by more than $100 million (2).

NOTES

(1) The full Committee report is online and includes a searchable database of contracts. The data in this post, and both graphs, are from either the report itself or the online summary.

(2) For more information on the national forest plan and the political response to it, visit the linked AP article by Matthew Daly (February 7th).

GRAPHIC: fatcat politics (2005)