Are Feds in an Outsourcing-Gate?

Ann All

Halliburton has become almost as closely linked with the Iraq war as Saddam Hussein or weapons of mass destruction. The company, which has close ties to Vice President Dick Cheney, won a number of federal contracts to provide services in Iraq -- with no competitive bidding required.


The firm also won nearly $125 million of the government's business associated with Hurricane Katrina clean-up efforts -- despite questions over its performance in Iraq.


It was likely these kinds of shenanigans -- which have more than a hint of impropriety -- that led the New York Times to do a piece on what it calls a "contracting boom" under the Bush administration. (We link to a reprint of the article in the San Francisco Chronicle, where articles tend to remain free and easily accessible longer than they do in the Times.)


According to the Times, federal outsourcing contracts have soared on Bush's watch, from $207 billion in 2000 to some $400 billion in 2006.


The article lays out a list of concerns associated with the practice, from a shortfall of government staffers overseeing the contracts, to a steep reduction in competitive bidding, to the growth of "quasi agencies" like Lockheed Martin, which has laid out $59 million in lobbying and political donations since 2000 and receives more money from the feds annually than the Justice or Energy departments.


The blogosphere was quick to react with posts like this one, from Matthew Yglesias, who contends that such federal contracts offer "the worst of both worlds," with "the inherent problems of the public sector" plus companies that are in it with an eye toward making money rather than doing right by the citizenry.


The Bush-approved transfer of six U.S. ports to a Middle Eastern company notwithstanding (a decision that was later revoked), both feds and state and local governments tend to shy away from outsourcing contracts with an offshore component.


Experts say it's likely that newly elected Democrat legislators will move to make it tougher for federal agencies to outsource their work to private firms. Unfortunately, any such actions will likely be prompted more by a desire for political retribution than an interest in fixing a system with obvious problems.

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