TOPIC: Contracting and contractors

Government contractors: never too big to fail us

In a recent article that hasn’t gotten much attention, Ron Nixon of the New York Times exposes a major problem with government contractors who get out of line.  When a federal agency wants to stop working with them (a process called “debarring”), sometimes they can’t:  the contractors are too important and too essential to the agency’s supply chain or service requirements.  BP, for example, is such a key supplier of fuel to the government that after the Deepwater Horizon disaster, when EPA officials wanted to make an example of BP by ending their involvement in government contracts government-wide, “the Pentagon objected: BP was its biggest supplier of fuel.

With no way to say no, the government continues to reward bad behavior.

Stimulus funds in California: Supervise if you’re going to weatherize

The California Inspector General’s office says a contractor hired to weatherize homes, and paid for by federal stimulus funds, overbilled the state agency overseeing the money by $34,803, Timothy Sandoval of CaliforniaWatch reports.

The report also notes that workers and supervisors performing weatherization renovations on homes have not been adequately trained, (more…)


The Washington Post’s Steve Vogel relays a study from the Partnership of Public Service that the Obama administration needs to hire 600,000 federal employees over the next four years. Many of those hires will replace retiring baby boomers. But specific federal agencies, like Veterans’ Affairs, also need more workers because their agency is having to take on a lot more duties (caring for Afghanistan and Iraq veterans in the VA example).

Vogel notes one of my pet issues in the tireless quest to “understand government”: government has expanded in the past 40 years, regardless of what political party is in charge of Congress or the White House. The number of government employees, though, has actually shrunk compared to the overall U.S. workforce:

In 1970, for example, the number of civilians on the federal payroll numbered 2,095,100, a figure that represented a little more than 1 percent of the U.S. population. In 2008, the comparable figure was 2,020,200, or 0.66 percent.

However, the figures do not reflect the enormous growth of the government contractor force as the result of privatization efforts pursued by previous administrations.

The Obama administration has signaled in its budget its intention to replace many contractors with government workers, particularly in the field of defense acquisition. This is another reason for the predicted surge in government hiring.

What you have now is hard-to-fathom situations where for-profit companies are providing security Afghanistan and Iraq and have interrogated terrorist detainees. There are more private contractors in Afghanistan than U.S. troops.

But those are just the famous examples — privatization has happened throughout the government. If the Obama’s big-ticket policies happen — health care reform, a cap-and-trade bill, revamped financial regulations — will the policy changes be implemented primarily by civil servants or private contractors?-MB


Can an allegedly unprovoked and fatal shooting of 17 civilians be grounds for criminal prosecution? That’s what a Washington, D.C. district court was trying to decide yesterday—whether State Dept. contractor Blackwater could be charged under U.S. law for its employees killing Iraqi civilians last September. Thanks to a 2003 decree, the contractor is already immune from Iraqi law.

The Washington Post‘s Karen DeYoung and Del Quentin Wilbur report that “at least three Iraqis” appeared yesterday to provide evidence about Blackwater security guards opening fire against Iraqi people. Also, two Iraqi police officers have reportedly been flown in to testify. Otherwise, little is known about prosecuting the State Dept’s prime security contractor. Read DeYoung and Wilbur here. MB


Two weeks ago the New York Times rpeorted that State Dept. contractor Blackwater was largely off the hook for their allegedly unwarranted shootings of Iraqi civilians. But the Wall Street Journal’s August Cole reports that the private security company’s bad reputation is hurting it in other ways.

Jerry Sanders, the mayor of San Diego, is trying to stop Blackwater from getting a permit for a 66,000-square-foot firearms training base in the area. Southern California residents have complained about other Blackwater training bases for environmental and political reasons. Also, the FBI is still investigating two separate Blackwater shooting incidents in BaghdadRead Cole here.  MB


And eventually everything calms down and you can get back to business as usual.  Based on James Risen’s report in the New York Times, that’s what appears to have happened with Blackwater USA, the private security contractor with the largest role in protecting U.S. personnel and resources in Iraq.  Eight months ago Blackwater guards were involved in a shooting incident in Baghdad — the infamous Nisour Square shootout — which ended with 17 Iraqi civilians dead.  Word was that Blackwater would lose their security contract and that those responsible for wrongful deaths in Iraq would be prosecuted in the U.S. or in Iraq.  But the State Department has renewed its contract with Blackwater and no one — except the Iraqi people — has paid a price.  Read Risen here.  EH


The Washington Post’s Walter Pincus reported yesterday that the U.S. army in Iraq is looking toward private contractors to train the Iraq military. Reliance on the private sector for Iraq security is well-documented but contracting out the military transition teams would be a first.

If the plan goes through, contractors will play a central role in the presumed Iraqi endgame of turning security over from the U.S. to Iraqi military. That is presuming that the U.S., and the contractors profiting from the war, would at some point like to leave IraqRead Pincus here.  MB


Poorly grounded electrical wiring in Iraq installed by mega-contractor KBR has directly contributed to the deaths of at least five U.S. troops. The New York Times’ James Risen explained yesterday how the Pentagon and KBR have been unwilling and unable to confront a rudimentary problem. 

A departing KBR electrician told the company that the wiring was a “disaster waiting to happen” back in 2005. KBR told the Pentagon about the problem in 2007. The Pentagon, though, has still not responded, lacking contracting overseers that can deal with building maintenance issues. The most recent wiring-related death occurred this January when Staff Sgt. Ryan D. Maseth was electrocuted in the shower.  Read Risen here.  MB


And pretty soon you’re talking about real money.  If Pentagon overspending and misspending weren’t so good for so many people, Scot Paltrow’s piece in Conde Nast Portfolio would be ringing alarm bells all over the country.  Turns out that the Defense Department’s accounting system is so outdated, cobbled together, and unreliable that it’s not a system at all.  Tracking payments to contractors, military services or the many subdepartments within DoD is practically impossible.  In fact, as Paltrow writes, after a transaction — say, in the millions of dollars — is entered into Defense’s Indiana-based financial records system, "any ability to reliably trace it disappears."  The agency, together with Congress, has been working to fix this problem since the era of $640 toilet seats — in 1985.  Now the losses are in the trillions.  Read Paltrow here.  ЕH


The Washington Post’s Christopher Lee takes stock of an overlooked part of President Bush’s government reform agenda — “competitive sourcing.” Bush wanted to translate 425,000 jobs performed by federal employees — from janitors to IT specialists — to the private sector, if companies could do the jobs more cheaply.

The result is that almost everyone’s unhappy. Feeling the administration is seeking every opportunity to get rid of them, federal employees’ morale is demoralized. The private companies are upset as well because only 50,000 jobs have been bid on. Also, federal employees’ health care and pensions don’t count toward the overall cost for the work to stay in the public sector.  Administration officials, however, say that the program has saved the government $7 billion.  Read Lee here.  MB