Did You Know - Private Contractors

I have a relative who works for the federal government in D.C. and he's explained to me, on a number of occasions, how the government now sub-contracts huge chunks of its work to private companies. Apparently this started under Ronald Reagan who held a firm belief that the private sector could do a much better job of almost anything than the government. Under Reagan, large numbers of government jobs were abolished and the work was farmed out to companies hovering around Washington. Based on reports that appear in the newspapers quite frequently, one would guess there is just as much waste and fraud, if not more, in the private sector.

More importantly, according to stuff I've heard, the government is paying obscene money to these sub-contractors for work that could have been done much more cheaply by government employees. For some jobs, we are paying over $400 per hour per employee.

Now this...

A new report by the House Committee on Oversight and Government Reform concludes that, under the Bush administration, the "shadow government of private companies working under federal contract has exploded in size. Between 2000 and 2005, procurement spending increased by over $175 billion dollars, making federal contracts the fastest growing component of federal discretionary spending." These big government contractors make huge profits at the expense of taxpayers. According to the report, federal spending to Halliburton "increased over 600% between 2000 and 2005." The Government Accountability Office recently found that the government has wasted at least $2.7 billion to Halliburton on "overpriced contracts or undocumented costs." Federal contracts to companies like Halliburton have grown five times faster than the overall inflation rate and almost twice as fast as the growth in other discretionary federal spending. A record level of "nearly 40 cents of every discretionary federal dollar now goes to private contractors."

From The Progress Report, June 28, 2007