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The NYT bills contractors as 'the fourth branch'

The lead story on the front page of the New York Times this morning is this:

In Washington, Contractors Take on Biggest Role Ever [NYT, 2.3.2007]
Contracting has soared during the Bush presidency, fueled by a philosophy that encourages outsourcing almost all government work.

The title, "The Fourth Branch," harkens back to former President Eisenhow's military industryial complex speech, which was given this month in 1961. Paul Brubaker recently gave me a copy to read... and I'm passing it along. It is interesting.

The crux of the story can be found right at the top of the almost 2,400 word story:

In June, short of people to process cases of incompetence and fraud by federal contractors, officials at the General Services Administration responded with what has become the government's reflexive answer to almost every problem.

They hired another contractor.

It did not matter that the company they chose, CACI International, had itself recently avoided a suspension from federal contracting; or that the work, delving into investigative files on other contractors, appeared to pose a conflict of interest; or that each person supplied by the company would cost taxpayers $104 an hour. SixCACI workers soon joined hundreds of other private-sector workers at the G.S.A., the government's management agency.

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.

One person said to me that they did a good job, better then the WP has in looking at government contracting.

I had a few thoughts after reading this story.

The first was that it is about time that somebody pay attention to this important story, but it seems to me that this story really misses the core issue. More on that in a moment, because I also think this story falls short in a number of ways.

One is the contention that this is just a Bush administration policy. The story makes some passing comments about the Clinton administration's reinventing government initiative, which reduced the government workforce. Outsourcing has been in vogue for some time.

The second was the contention that this was done "without a public debate or formal policy decision." What? It may not have been on the front page of the New York Times, but that doesn't mean it hasn't been debated. The Bush administration, dating back to 2001, has been a big proponent of outsourcing, a concept the administration brands as "competitive sourcing." Competitive sourcing has been a central part of the President's Management Agenda. Former OFPP Administrator Angela Styles pretty much only focused on competitive sourcing. And it is still a major issue for OMB Deputy Director for Management Clay Johnson. And lawmakers have been debating this issue over the past decade.

In fact, many of the contracting issues raised by the NYT can be found in the SARA Panel's report. In fact, some of the data that is billed as "an analysis by The New York Times" can be found in the SARA Panel's draft final report.

All of these critiques should not take away from the fact that this is an important issue worthy of debate. I'm not sure what spurred it to the front page of the Sunday edition of the NYT, but I actually think the story is helpful because it raises the visibility of how government work is getting done.

The story raises several issues:

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. ScottAmey, 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 forBlackwater USA security officers in Iraq, which involved several costly layers of subcontractors.

One can quivel with these to a certain degree... (My favorite of these is the next to the last point -- "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." And yet the response is to create more regulations?)...

But they all dance around the real issue -- how do we expect to get the job of government done? Successive administrations have bragging points of reducing the size of government, yet none of them have taken real steps toward reducing the scope of what needs to get done. The the contrary, this administration has broadened that scope. (Ah, it's not the military industrial complex, but the government industrial complex? Or the 'fourth branch of government'?)

The real debate, it seems, should be the question: What work is inherently governmental? That is the question that has gone largely without debate.

In the IT world, there has been a push to use commercial products. Why? Because IT is not inherently governmental. There is a thriving industry that creates the products that agencies can use.

But in the case sited by the NYT of the GSA contract to process cases of incompetence and fraud by federal contractors -- without knowing anything more then what theNYT has reported -- this sure seems like something that is is inherently governmental. In fact, the $20,000 contract that Doan didn't award but which has created a furry seems like something that could be determined to be inherently governmental.

The real question, which the NYT does not address, is what do we expect agencies to do?

Posted by Christopher Dorobek on Feb 04, 2007 at 12:16 PM


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