Janine Wedel - Shadow Elite - How the World's New Power Brokers Undermine Democracy, Government, and the Free Market

15. The 2003 information can be found in Larry Makinson, “Outsourcing the Pentagon: Who Benefits from the Politics and Economics of National Security?” The Center for Public Integrity, September 29, 2004, http://projects.publicintegrity.org/pns/report.aspx?aid=385.

The 2006 information is provided in Testimony of John P. Hutton, Acting Director, Acquisition and Sourcing Management, Government Accountability Office, “Defense Acquisitions: Improved Management and Oversight Needed to Better Control DOD’s Acquisition of Services,” May 10, 2007, p. 2, http://www.gao.gov/cgi-bin/getrpt?GAO-07-832T.

16. With regard to Defense accounting for almost three-quarters of the total federal procurement budget in 2008, these figures are calculated from data available on the Federal Procurement Data System (FPDS), at http://www.fpdsng.com/downloads/agency_data_submit_list.htm. With respect to the percentage of the budget of the U.S. intelligence community that goes to contracts, see Bonnie Goldstein, “Spy Central Slip-Up,” Slate.com, June 8, 2007, at http://www.slate.com/id/2168032/entry/2168033/. According to a declassified government document obtained by investigative journalist Tim Shorrock in 2007, some 70 percent of the U.S. intelligence budget is spent on contracts (Tim Shorrock, “Private Spies,” The New York Post , May 11, 2008). With regard to contract employees making up one-quarter of the core intelligence workforce, see Robert O’Harrow Jr., “Contractors Augment Intelligence Agencies,” Washington Post , August 28, 2008, p. D01, http://www.washingtonpost.com/wp-dyn/content/article/2008/08/27/AR2008082703142.html.

17. Dempsey was elected vice president of Booz Allen in 2005. The quote from her is from Tim Shorrock, “The Spy Who Billed Me,” Mother Jones , January/February 2005, http://www.motherjones.com/news/outfront/2005/01/12_400.html. The figure on total number of workers at Booz Allen is found in http://www.boozallen.com/media/file/Booz_Allen_Annual_Report_06–07.pdf. Other facts are provided in Zachary A. Goldfarb, “The New Booz & Co.,” washingtonpost.com, May 21, 2008, http://voices.washingtonpost.com/washbizblog/2008/05/the_new_booz_co.html. The award given to Booz Allen, conferred by the Professional Services Council, the Fairfax County Chamber of Commerce, and Washington Technology magazine, “recognizes the firm for its outstanding contributions during the past year to its employees, the government contracting industry, and the U.S. government.” See http://www.boozallen.com/about/article/658795?1pid=825646. For government departments that contract with Booz Allen, see http://eagle.bah.com/

and http://www.boozallen.com/media/file/Booz_Allen_Annual_Report_06–07.pdf. See http://www.aclu.org/pdfs/safefree/boozallen20060914.pdf. See also Elizabeth Brown, “Outsourcing the Defense Budget,” The Center for Public Integrity, July 29, 2004, http://projects.publicintegrity.org/report.aspx?aid=363&sid=200.

18. The size of the federal civilian workforce fell by 426,200 positions between January 1993 and September 2000. (See History of the National Partnership for Reinventing Government Accomplishments, 1993–2000, http://govinfo.library.unt.edu/npr/whoweare/appendixf.html#1.)

With regard to the Department of Defense, the Pentagon reduced its civilian and military workforce after the end of the Cold War, resulting in a disproportionate reduction of defense employees overseeing contractors. In 2000, a Defense Department Inspector General Audit reported that the Department had decreased its acquisition workforce by about 50 percent from 460,516 employees at the end of FY 1990 to 230,556 at the end of FY 1999, while the workload had not shrunk proportionately. The dollar value of Defense procurement underwent a marginal decline (approximately 3 percent) during the period, while procurement actions rose by approximately 12 percent, from about 13.2 million to about 14.8 million (Office of the Inspector General Department of Defense, “Closing Overage Contracts Prior to Fielding a New DOD Contractor Payment System,” Audit Report , Report No. D-2002–027, December 19, 2001, p. 10, http://www.dodig.mil/audit/reports/fy02/20–027.pdf).

For data on the Bush administration, see Paul C. Light, “The New True Size of Government,” August 2006, p. 11, http://wagner.nyu.edu/performance/files/True_Size.pdf. In 2000 there were 57,835 federal officials in five job classifications related to acquisition and contracting, according to a database maintained by the U.S. Office of Personnel Management (Office of Personnel Management, Central Personnel Data File: Status File , Sept. 2000). In 2006, the number was 58,723 (Federal Acquisition Institute, Annual Report on the Federal Acquisition Workforce Fiscal Year 2006 , May 2007). On the expansion of the workload, see United States House of Representatives, Committee on Oversight and Government Reform, Majority Staff, June 2007, More Dollars, Less Sense: Worsening Contracting Trends under the Bush Administration , p. 10. For details about the increased skills required on the job, see “Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress” (December 2006), at http://www.acqnet.gov/comp/aap/index.html.

19. For the list of high risk areas including the Departments of Defense and Energy, as well as NASA, see GAO, High Risk Series: An Update , Washington, DC: GAO, GAO-07–310, January 2007, pp. 6, 7, available at http://www.gao.gov/new.items/d07310.pdf.

The Walker quote is from Comptroller General David Walker, Remarks at the George Washington University Law School Symposium on the Future of Competitive Sourcing, September 15, 2003 (transcript on file with the Public Contract Law Journal). The GAO quote is from GAO, Military Operations: High-Level DOD Action Needed to Address Long-Standing Problems with Management and Oversight of Contractors Supporting Deployed Forces , United States Government Accountability Office, GAO-07–145, December 2006, p. 35, www.gao.gov/cgi-bin/getrpt?GAO-07-145. The assessment from the Department of Homeland Security’s inspector general can be found at Department of Homeland Security Inspector General, Department of Homeland Security’s Procurement and Program Management Operations , OIG-0–53, Sept. 2005, p. 8, http://www.dhs.gov/xoig/assets/mgmtrpts/OIG_05–53_Sep05.pdf.

20. The Acquisition Advisory Panel has written: “In many cases contractor personnel work alongside federal employees in the federal workspace; often performing identical functions.” Acquisition Advisory Panel, Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress, January 2007, p. 392, http://acquisition.gov/comp/aap/24102_GSA.pdf.

21. The SETA contractor here referenced is Glenn Danielson. Author’s conversation with Glenn Danielson, November 25, 2008.

22. The definition of inherently governmental functions is from Executive Office of the President, Office of Management and Budget, “Circular No. A-76 (Revised) to the Heads of Executive Departments and Establishments” on the “Performance of Commercial Activities,” May 29, 2003, http://www.whitehouse.gov/omb/circulars/a076/a76_rev2003.pdf, or http://www.whitehouse.gov/omb/circulars/a076/a76_incl_tech_correction.pdf.

Legal scholar Paul Verkuil discusses the implications of outsourcing government functions in Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do About It (New York: Cambridge University Press, 2007).

The list of eight inherently governmental functions is contained in Office of Management and Budget, Office of Federal Procurement Policy, Policy Letter 92–1 to the Heads of Executive Agencies and Departments, Washington, DC, September 23, 1992, http://www.whitehouse.gov/omb/procurement/policy_letters/92–1_092392.html. This list also appears in the Federal Acquisition Regulation (FAR), 7.503, March 2005, http://www.acquisition.gov/far/reissue/FARvol1ForPaperOnly.pdf. According to the Foreword to the FAR, “The FAR is the primary regulation for use by all Federal Executive agencies in their acquisition of supplies and services with appropriated funds. It became effective on April 1, 1984, and is issued within applicable laws under the joint authorities of the Administrator of General Services, the Secretary of Defense, and the Administrator for the National Aeronautics and Space Administration, under the broad policy guidelines of the Administrator, Office of Federal Procurement Policy, Office of Management and Budget.”