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« Hope comes from fair access to opportunities and resources | Main | Ralph Fasanella - Artist of the Worker »


Non-Competitive Federal Contracts Continue to Skyrocket

By Simone Davis
February 13, 2008

Under George Bush's control, in the last six years, federal contracts have become the fastest growing component of federal discretionary spending. Now, Bush’s new budget request calls for more than double the amount of spending on defense accounts than did the budget he inherited from his predecessor.

This growth in federal procurement has enriched private contractors. But it has also come at a steep cost for federal taxpayers. Overcharging has been frequent, and billions of dollars of taxpayer money have been squandered. (Dollars, Not Sense: Government Contracting Under the Bush Administration)

Even defense experts are surprised at how generous the Bush administration is willing to be with the taxpayers' money, in light of a faltering economy and deep cuts to domestic programs. Not counting the hundreds of billions that Bush has already demanded from us for his Iraq operations, now he insists that we give him another $515 billion just for building up the defense department.

No-bid (non-competitive) contracts have grown by 115% under Bush. Seven years of the unbelievably healthy profits experienced by defense contractors will continue for at least another year, if George Bush has anything at all to do with it.

He just submitted his new defense spending package calling for over $104 billion just for new weapons procurement and $80 billion just for weapon development. That taxpayer money goes directly into the coffers of private businesses that have experienced mega-profitable years as a result of George Bush.

Meanwhile, the Bush Budget fails to address – and even exacerbates – real threats to security that Americans are experiencing every day. More people are going hungry, and the President proposes eliminating food stamp coverage for more than 300,000 people in low-income working families with children. More people can't pay their bills, and he would cut 22 percent from the Low-Income Home Energy Assistance Program. The Community Services Block Grant, "a $654 million program that provides housing, nutrition, education and job services to low-income people," would be eliminated...

Also proposed are $170 billion in cuts to Medicare and $14 billion to Medicaid. Of course, tax cuts for the wealthiest Americans who are eating, sleeping, and generally living just fine, thanks, are preserved...

For Americans whose lives are threatened daily by how hard it is to make ends meet, the Bush defense budget is indeed just another Bridge to Nowhere. (Katrina vanden Heuvel, The Nation, Bush Defense Budget)

According to the New York Times, Bush's increased defense department budget would make annual military spending, when adjusted for inflation, its highest level since World War II. Further, Bush's military budget does not even include war funding, nuclear weapons programs, taking care of returning veterans, or covering the interest on the defense department's share of the debt.
"The fiscal year 2009 budget may be about as good as it gets for defense contractors," said Steve Kosiak, vice president of budget studies at the Center for Strategic and Budgetary Assessments. "We have had eight years of quite dramatic growth in [the Defense Department's] weapons acquisition accounts."

The armed forces have made many no-bid contractors very rich. This may be their last year to give money away so freely. Bush is putting forth their biggest requests to date.

The Air Force can't make due on $144 billion a year. The service is telling Congress it needs nearly another $19 billion for fiscal year 2009 -- including about $1.7 billion worth of extra fighter jets. (Air Force: $144 Billion a Year Not Enough)

So who will get richer? All of these billions will go to Lockheed Martin, General Dynamics, SI International, CACI International, Northrop Grumman, and many others. Even with the economy faltering and most Americans strapped for cash, Bush is demanding an increase of 7.5% for his defense spending!

Reinforcing the services’ quiet campaign for these weapons are legions of lobbyists and defense contractors. And with many of the weapons produced in their states and districts, a number of lawmakers have a parochial interest in legislating more defense funds for such programs...

“The fixation Congress has with buying irrelevant hardware definitely retards the country’s ability to respond to modern warfare,” said Winslow Wheeler, a former congressional staff aide who now directs the Straus Military Reform Project at the Center for Defense Information, a nonpartisan military research group.

“We delude ourselves into thinking this gigantic budget prepares us to adequately deal with these challenges,” he said. (Defense Budget Still Not Big Enough for Some)

Recently, at the request of Rep. Henry A. Waxman, the Committee on Oversight and Government Reform in the U.S. House of Representatives conducted an investigation of federal contracting. The Committee's report is the first comprehensive assessment of federal contracting under the Bush Administration. The report reaches three primary conclusions:

  1. Procurement Spending Is Accelerating Rapidly. Between 2000 and 2005, procurement spending rose by 86% to $377.5 billion annually. Spending on federal contracts grew over twice as fast as other discretionary federal spending. Under President Bush, the federal government is now spending nearly 40 cents of every discretionary dollar on contracts with private companies, a record level.
  2. Contract Mismanagement Is Widespread. The growth in federal contracts has been accompanied by pervasive mismanagement. Mistakes have been made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight to recovery of contract overcharges.
  3. The Costs to the Taxpayer Are Enormous. The report identifies 118 federal contracts worth $745.5 billion that have been found by government officials to include significant waste, fraud, abuse, or mismanagement. Each of the Bush Administration’s three signature initiatives — homeland security, the war and reconstruction in Iraq, and Hurricane Katrina recovery — has been characterized by wasteful contract spending.

There is no single reason for the rising waste, fraud, and abuse in federal contracting. Multiple causes — including poor planning, noncompetitive awards, abuse of contract flexibilities, inadequate oversight, and corruption — have all played a part. The problems are widespread, undermining such major initiatives as domestic spending on homeland security, the rebuilding of Iraq, and the recovery from Hurricane Katrina.

Federal procurement spending is highly concentrated on a few large contractors, with the five largest federal contractors receiving over 20% of the contract dollars awarded in 2005. Last year, the largest federal contractor, Lockheed Martin, received contracts worth more than the total combined budgets of the Department of Commerce, the Department of the Interior, the Small Business Administration, and the U.S. Congress.

I think that all of us know and remember that Dick Cheney served as CEO of Halliburton right before being selected by George Bush as his vice president. Federal spending on Halliburton "no bid" contracts increased over 600% between 2000 and 2005, while all other "no bid" contracts during that same period grew by 115%.

While it should come as no surprise, therefore, to any of us that the fastest growing contractor under the Bush Administration has been Halliburton, it never ceases to amaze me that we (citizens) just accept it and put up with it. Particularly since those contracts haven't been offered to any other companies and have been exclusively offered to Halliburton, the ethics of these Halliburton "no bid" contracts are way off the chart of what's acceptable.

The Government Accountability Office has previously found that the government has wasted at least $2.7 billion to Halliburton on “overpriced contracts or undocumented costs.” Just at the end of 2005, Cheney’s stock options were valued at more than $8 million, a 3,281 percent gain from 2004. It makes you wonder how much Cheney gained in the years 2006 and 2007 and what he stands to profit from this most recent budget submitted by George Bush.

Money is taken out of our pocket and goes directly into Cheney's bank account. When so many of us are struggling to keep our homes, our jobs and save for our children's education, this robbery by Cheney and Bush feels like the worst kind of torture and rape. When will the people rise up and put a stop to this theft by our leaders?

To investigate these issues further, you may be interested in reading this report from Congress - More Dollars, Less Sense: Worsening Contracting Trends Under the Bush Administration (pdf) - and then compare it to the exorbitant demands for more money for Bush and Cheney's no-bid contracts.


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The blog post previous to it is titled "Hope comes from fair access to opportunities and resources"

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