Sunday, February 04, 2007

Too much contracting? Why can't the government hold onto its own expertise?

Great article today published by the New York Times on the use of contractors by the federal government. While I knew that contractors were embedded with the government, I did not realize the extent.
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.

Contractors still build ships and satellites, but they also collect income taxes and work up agency budgets, fly pilotless spy aircraft and take the minutes at policy meetings on the war. They sit next to federal employees at nearly every agency; far more people work under contracts than are directly employed by the government. Even the government’s online database for tracking contracts, the Federal Procurement Data System, has been outsourced (and is famously difficult to use).
But the kicker for me was to learn that Lockheed Martin gets more federal money than the Department of Justice!
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.
I'm reminded of Omni Consumer Products, the fictional megacorporation that runs the City of Detroit in the RoboCop franchise. In the movies, we see how driving for profit is not in the best interest of the community.

Now, I'm not suggesting that Lockheed Martin is really an Omni Consumer Products (Take a close look at the track record of this company, and you'll see that we've gambled in markets traditionally regarded as non-profit: hospitals, prisons, space exploration. I say good business is where you find it.) But, rather, I am saying that the line for designating what is inherently governmental and what is not inherently governmental has become increasingly less defined. I wouldn't be surprisd if contractors helped government agencies determine what billets and functions were inherently governmental and what billets and functions were not inherently governmental... and then bid on those jobs they helped clarify as not needing to be done by government employees.


  1. Why the surprise? This was the big plan.

    One of the first terms I learned as an Ensign over 20 years ago was "A-76." Contracting out work that could be done by civilians was supposed to be a best practice. Sometimes it was a good idea, as often it was not.

    This isn't a Bush conspiracy -- it's been part of the government management model for my entire adult life.

  2. YES. The CG does use contractors to help determine which jobs can be contracted out...BTDT.