Sunday, September 3, 2017

Contracting, a Not-So-Rare Federal Disease

There are several assumptions/beliefs that underlie the federal government’s proclivity to engage third party, private and profit-driven, contractors, in lieu of using federal employees, including: cost efficiencies where workers can be hired without the protections and benefits of the Civil Service system, the ability to scale up or down without long-term employee commitments under that Civil Service, the need to access specialized skillsets (so-called “advisory services”), the distrust of government vs the belief in the superiority of a competitive private sector (generally a GOP perspective), the ability to shift “blame and responsibility,” avoiding embarrassing transparency, the political gamesmanship of describing budget proposals as reflecting staffing cuts (when contractors take over those “reduced” direct federal jobs) and the benefits of paying off political supporters/insiders with lucrative government contracts.
Over the years, we have increased our reliance on private contractors to replace government functions, ranging from guarding U.S. embassies (formerly reliant solely on U.S. Marines), providing security in active combat zones (normally performed by Army or Marine soldiers) to owning and operating federal prisons. Whatever the assumptions may have been around when the trend began, the reliance on outside contractors has grown so vast that we have effectively no true standards to determine cost efficiencies; we have no clue what the actual comparisons (private vs federal) would reflect. The Office of Management and Budget has required government agencies (under their Circular A-76) to develop comparison standards and hard numbers, but so far… we have no clue.
Even as the Obama administration moved to eliminate private contractors running federal prisons, Attorney General Jeff Sessions has now reversed that policy. Several of Donald Trump’s closest advisors – discussed below – are suggesting a further expansion of armed contractors assuming increasing military duties as the correct solution to the continued combat in the no-win war in Afghanistan. In fairness to the President, the explosive use of service out-source contractors is hardly something that can be placed on his shoulders. That reliance has increased through many presidencies, including the Obama administration. It accelerated heavily during the Bush (“W”) administration as it faced a rapidly-expanding post-9/11 combat mission.
Here is an interesting analysis, reflecting the status of federal service contracting during the Obama years, by the Project on Government Oversight (POGO, 4/15/13): “In a hearing last year, Chairman Claire McCaskill (D-MO) stated, ‘the cost of service contracts has increased by 44 percent over the last ten years…to $324 billion, while in the same time, spending on federal employees has only increased by 34 percent…to $229 billion.’
Additionally, service contract spending exceeds the amount of federal contract spending on goods. In fiscal year 2012, the federal government spent over $307 billion on services, nearly 60 percent of the $517 billion awarded for all federal contracts. The Government Accountability Office (GAO) reported that in fiscal year 2011, nearly 80 percent of all civilian agency contract spending was for services—services such as professional management and information technology support.
The Defense Department (DoD) has stated with regard to service contracts that ‘[t]he savings are here. This is Total Force Manpower, but its growth has been unchallenged and often we don’t even know what is in the base.’ As the following chart shows, from 2001 to 2010, the growth of service contractor personnel has far outpaced that of active duty military and civilian DoD personnel.
There is absolutely no proof that this use of contractors, now heavily embedded in the federal budgeting process for dozens of federal agencies as well as the military, actually saves taxpayer’s any money, and without any doubt, the ability to hold those who actually perform the services accountable is much more difficult. I have seen professional assessments that range to cost factors that increase costs-per-unit-of-labor of private contractors over government employee equivalents by almost double, a very big hit to taxpayers. But honestly, nobody really knows anymore; private contracting is completely out of hand. Add to that the increased leaks of sensitive classified government information. Remember that leak-meister Edward Snowden worked as an employee of an NSA subcontractor (Booz Allen Hamilton).
And then there is the poster-boy for military outsourcing (effectively federal mercenaries), Erik Prince, whose Blackwater Security Consulting (which was forced to change its name to “Xe Services due to its notoriety) was involved in an ugly shooting controversy/scandal in Fallujah during the Iraq War. “A federal jury Wednesday [October 22, 2014] convicted four former Blackwater guards of a 2007 shooting that killed 14 unarmed Iraqi civilians and wounded 17 others as a U.S. diplomatic convoy drove through Baghdad.” USA Today (10/22/14).
Well, Prince – who is Donald Trump’s Secretary of Education, Betsy DeVos’ brother – has the ear of the President, even though Mr. Trump has not yet bent to the notion of handing the Afghan War over, in significant part, to Prince and his band of merry mercenaries. Here are some excerpts from Prince’s OpEd piece in the August 29th New York Times, after analogizing his efforts to those of the WWII Flying Tigers: “This spring, as Afghanistan policy was debated in Washington, the president asked for fresh options to end the war honorably. Faced with two choices — pulling out entirely or staying the course — I argued strongly for a new approach, a third path that would put in place a light footprint of American Special Forces, as well as contractors to work with Afghans to focus on the goal that Americans really care about: denying America’s enemies the sanctuary they used to plan the Sept. 11 attacks... Unfortunately, serving or recently retired Pentagon generals monopolized the conversation, so a conventional outcome was assured.
“The third path I’m talking about is not untested, even if it has been forgotten. When the United States first went into Afghanistan in 2001, it devastated the Taliban and Al Qaeda in a matter of weeks using only a few hundred C.I.A. and Special Operations personnel, backed by American air power. Later, when the United States transitioned to conventional Pentagon stability operations, this success was reversed. Since then, the Pentagon’s biggest innovation has been to vary American and NATO troop levels from 9,000 to 140,000, and to increase civilian contractors to a peak level of 117,000 during President Obama’s ‘surge.’…
“My proposal is for a sustainable footprint of 2,000 American Special Operations and support personnel, as well as a contractor force of less than 6,000 (far less than the 26,000 in country now). This team would provide a support structure for the Afghans, allowing the United States’ conventional forces to return home.
“This plan would use former Special Operations veterans as contractors who would live, train and patrol alongside their Afghan counterparts at the lowest company and battalion levels — where it matters most. American veterans, whose extraordinary knowledge and experience could be vital to Afghan success on the ground, would serve as adjuncts to the Afghan Army and would perform in strict conformity with Afghan rules of engagement, eliminating the stigma of a foreign occupying force. Supplemental Afghan air power, flown with Afghan markings, would include a contractor safety pilot, but only the onboard Afghan officer would make weapons decisions. All contracted personnel would be subject to the Uniform Code of Military Justice, just as active-duty American troops are now.” Clearly, he has the ear of Trump and his most senior advisors.
The fact that, with that Fallujah incident burned into the psyche of the American public, Erik Prince even thinks the U.S. government should hire mercenaries to fight its wars is alarming enough, but the notion of hiring yet another contractor has become an all-too-easy federal practice. If there ever were a swamp worthy of review with an eye to potential drainage, it has to be this inordinate federal reliance on private contractors. Given the President’s innate disdain for government employees (with only slightly better view of the military), we are unlike to see a movement back to the public sector from those private, for-profit service-providing contractors.
I’m Peter Dekom, and the federal budget structure has become too complex for most Americans – as well as Congress itself – to understand.

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