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Down The Drain:How Lack of Contractor Oversight Is Throwing Our Money Away

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Down the Drain: How Lack of Contractor Outsourcing Oversight is Throwing Our Money Away

As most of us know, billions of dollars have been wasted during the Iraq conflict due to private contractor sole-source bidding -- dollars that are desperately needed in many other areas. A recent article in Business Week titled "When Outsourcing Turns Outrageous" spells out the corruption very clearly.

The picture that Business Week paints of the corruption in handling government contracts is very troubling and only adds to the flood of negative news coming out of Washington. It adds to the litany of areas being mishandled by our leaders including the latest one -- pagegate, a Republican morality issue of all things. Need a second look? Yep, it reads "a Republican MORALITY issue."

Business Week reported that a recent non-partisan study determined that contractor competitive bidding and their inherent nimbleness allows private contractors to perform military support tasks (meals, construction, security etc) a third cheaper than if the tasks were performed by the military. The study did not include a fraud and waist factor that relates to contractors. Business Week also reported that there is an underlying presumption in Washington that with ongoing fraud and waist, we should still save with contractors. Others, who think the fraud and waist loss outstrips the described theoretical one third savings, aren't convinced. Jeffery Smith, a former CIA general counsel, says that what's happening in Iraq is totally disgraceful..

Many investigations into outsourcing corruption are just getting under way. Investigators are discovering that instances of military outsourcing gone bad are now legion by many. Some disturbing facts related to the fraud are:

---The Defense Department has recovered $2 billion since 2001 from fraud.


---The Special IG for Iraq Reconstruction currently has 80 open investigations.

---A house committee has identified $21.3 billion in problem contracts overall.

---Roughly $60 billion has been paid to contractors to date in Iraq, a place were many billions simply
vanished.

---The current $100 billion in sole-source contracts increased from $65 billion in '00 with much of the money going to the administration's favorites such as Hallliburton. (As we know, Cheney was CEO of Halliburton and -- as we're now finding out -- strangely, Rumsfeld reports directly to Cheney not Bush.)

Congress passed legislation in the '90s that reduced the oversight staff by 38%. That was logical then since we were down-shifting after the cold war. But then, the over-sight staff was chopped again as we entered the Iraq war. Worse, by law, the Pentagon can circumvent competitive bidding in emergency situations. The combination of that law, the circumstance and the current players allowed the door to swing wide open for all kinds of corruption.

Experts say that there are obvious steps the Pentagon should take -- such as increasing the procurement staff and toughing the procedures. But then, the Pentagon has no such plans. Rather, it's about to chop its oversight staff again. Here, the winners are the contractors, certain powers in the government and a probable assortment of lobbyists. The losers: everyone else.

The above invites a few comments on the subject.

---Since George W chose to go to an unnecessary war at a time of his choosing , the war could hardly be
classified as an "emergency," which was and is the rational for much of the sole-sourcing.

---Sole-source bidding deletes the large "competitive bidding" advantage in the described one third savings while adding in the fraud factor.

---A view that fraud may be acceptable since it is offset by the one third savings doesn't compute. With the recent blowout in our treasure, we need every cent we can get.

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I glad you are giving me a heads-up on what's happ... by Bacchus on Tuesday, Oct 10, 2006 at 10:15:53 PM