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Shadow Elite: Selling Out Uncle Sam -- Who's Overseeing the Contractors?

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2010-08-04-unclesam.jpg

This is the third installment of a Shadow Elite series, investigating the game-changing effects of government contracting on the most vital government functions.

How far does the crisis of government contracting oversight go? Apparently, it extends deep into some of America's most hallowed ground: Arlington National Cemetery.

The Army Inspector General and the Senate Subcommittee on Contracting Oversight this summer have issued scathing reports on mismanagement at Arlington which they say has resulted in hundreds, even thousands, of graves mismarked. Salon broke the story last year, and here are some of the findings confirmed by government investigators.
  • The cemetary OK'ed multi-million dollar IT contracts but didn't have an acquisition strategy.
  • No contracting officer was stationed at the cemetery.
  • A cemetary official served as de facto contracting officer for the technology upgrade, though he was not trained in that role.
  • Contracting officers up the command chain usually just rubber-stamped whichever company cemetery officials recommended.
  • That de facto official was the government's point man on dozens of contracts that Army investigators say wasted more than $5.5 million and came up with no working database to track grave sites.
In the words of subcommittee head Sen. Claire McCaskill (D-Mo.):

We know that nearly every possible problem in contracting occurred, and consequences are appalling....I'm looking forward to talking with those responsible.

Just who is responsible? Of course cemetary management is taking the heavy knocks but the Arlington case is also a symptom of a far bigger, government-wide crisis in the capacity to adequately oversee contract work. Janine studied this as part of her research for her book Shadow Elite, and in a follow-on study (supported by the Ford Foundation), Selling Out Uncle Sam: How the Myth of Small Government Undermines National Security, that's just been released. 

In theory, contracts and contractors are overseen by government employees who would guard against abuse, but there are simply not enough of them to keep up with all the outsourcing.
In a 2008 survey of federal acquisition professionals, one respondent described the perception that contract officers have gone extinct, that they are "....as rare as white Siberian tigers."

That's an overstatement of course but the numbers are not encouraging. The number of civil servants who could potentially oversee contractors fell during the Clinton administration and continued to drop during the Bush administration. The contracting business boomed under Bush, while the "acquisition workforce"--government workers charged with the conceptualization, design, awarding, use, or quality control of contracts and contractors--remained virtually constant. In 2002, each federal acquisition official oversaw the disbursement of an average of $3.5 million in service contracts. In 2006 the average workload expanded to $7 million and, in 2008, to $10.6 million, while also demanding of the workforce increasingly complex contracting skills.

One big area of concern: the Department of Defense, where the number of procurement professionals has been shrinking since the early 1990s, even as the volume of contracts (both the numbers of contracts awarded and the value of these contracts) has risen rapidly. This disproportion puts the government at risk of losing control over mission-related decisions and the decision-making process, the Government Accountability Office has concluded. Government officials are made responsible for not only properly awarding contracts, but also supervising and evaluating the performance of contractors on the job. There is not enough capacity for them to do all this effectively. As the U.S. Comptroller General expressed:

At the same time procurement spending has skyrocketed, fewer acquisition professionals are available to award and--just as importantly--administer contracts. Two important aspects of this issue are the numbers and skills of contracting personnel and DOD's ability to effectively oversee contractor performance.

The Comptroller General concluded that "The acquisition workforce faces serious challenges" in such matters as "size, skills, knowledge, and succession planning." The issue of oversight is further complicated by the multiple layers of contracting and subcontracting that are endemic to the contracting system. Large contracting projects typically farm out areas of work to multiple subcontractors. While the practice makes sense in terms of assembling a variety of competencies in one project, it further distances government monitoring from the work being done and the ability to assess it. In sum, when the number of civil servants available to supervise government contracts and contractors proportionately falls, thus decreasing the government's oversight capacity, and when crucial governmental functions are outsourced, government begins to resemble Swiss-cheese--full of holes. The governance landscape becomes vulnerable to personal and corporate agendas and to operations that are less than in the public interest.

Certainly the public interest hasn't been served at Arlington National Cemetary, and in fact a criminal probe has reportedly been launched. But it seems likely that simple, perfectly legal mismanagement and poor oversight was a key culprit here: cemetary officials saw their budget nearly double in less than 10 years, an increasing portion went to contractors, they were not trained to deal with contractors and they did not have a strategy before handing out the deals. This is a disturbingly familiar story in various corners of federal government. The difference here is that faulty oversight has led not just to waste and inefficiency, but real heartbreak for hundreds of families whose loved one or ancestor served their country, and assumed, in the end, that their country would do the same for them. They assumed wrong.