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

Hayden is quoted in Katherine Shrader, “CIA Reviewing Use of Contractors,” Associated Press, September 18 2006. Response of Agency officials from: Tim Shorrock, “Private Spies,” New York Post , May 11, 2008, http://www.nypost.com/seven/05112008/postopinion/postopbooks/private_spies_110301.htm.

42. Tim Shorrock, “Former High-Ranking Bush Officials Enjoy War Profits,” Salon.com, May 29, 2008, http://www.salon.com/news/excerpt/2008/05/29/spies_for_hire/index.html.

43. Mini Workshop on Public-Private Interfaces, New America Foundation, July 19, 2007.

44. Information on Booz Allen’s split is from Zachary A. Goldfarb, “Booz Allen Units to Part Ways: McLean Consulting Firm’s Government Division Being Sold to Carlyle Group,” Washington Post , May 17, 2008, p. D01, http://www.washingtonpost.com/wp-dyn/content/article/2008/05/16/AR2008051603788.html. Information on government versus commercial units at Booz Allen is from Zachary A. Goldfarb, “The New Booz & Co.,” Washington Post , May 21, 2008, http://voices.washingtonpost.com/washbizblog/2008/05/the_new_booz_co.html.

45. For a discussion of the tension between accountability and autonomy of “private” government contractors, including legal decisions, see Daniel Guttman’s “Public and Private Service: The Twentieth Century Culture of Contracting Out and the Evolving Law of Diffused Sovereignty,” Administrative Law Review 52, no. 3 (2000), Washington, DC: Washington Law Review, American University, pp. 901–908. The article also outlines the kinds of conflicts of interest that arise between private employees and their public overseers (pp. 896–901).

46. Quoted in Shane Harris, “Ethics Office Launches Inquiry into Procurement Practices,” Gov-Exec.com, September 26, 2002, http://www.govexec.com/story_page.cfm?articleid=23972&printerfriendlyvers=1. Angela Styles, former administrator of the Office of Federal Procurement Policy (for the Office of Management and Budget), makes a similar point.

47. For contract oversight investigations under Bush I, see Office of Management and Budget, Summary Report of the SWAT Team on Civilian Agency Contracting: Improving Contracting Practices and Management Controls on Cost-Type Federal Contracts , Washington, DC: Office of Management and Budget, December 3, 1992, http://www1.law.nyu.edu/journals/envtllaw/issues/vol2/1/2nyuelj34.html.

48. Kelman’s evolving door can be found at Steve Kelman, “Evolving Door,” December 5, 2003, http://www.govexec.com/story_page.cfm?filepath=/dailyfed/1203/120803ff.htm. With regard to Kelman’s work with industry associations, see, for example, Jeff Shear, “He’s the President’s Hatchet Man,” National Journal , March 25, 1996, p. 754. See also Project On Government Oversight, “Pick Pocketing the Taxpayer: The Insidious Effects of Acquisition Reform,” March 11, 2002, http://www.pogo.org/pogofiles/reports/contract-oversight/pickpocketing-the-taxpayer/co-rcv-20020311.html.

The 1996 FARA is also called the Clinger-Cohen Act.

49. The 40 percent figure (for 2005) is provided by the Acquisition Advisory Panel (Acquisition Advisory Panel, Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress , January 2007, p. 106, http://acquisition.gov/comp/aap/24102_GSA.pdf). Description of IDIQ contracts can be found in the same report on pp. 67–72.

50. The Acquisition Advisory Panel citations are at: Acquisition Advisory Panel, Report of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress , p. 405.

51. The government Web site where task orders are posted is http://fedbizopps.gov. On the billions that can be collected in task orders, see, for instance Bob Brewin’s blog on http://nextgov.com, “Obama’s Transparency Lost on Defense,” February 10, 2009, http://whatsbrewin.nextgov.com/2009/02/obamas_transparency_lost_on_de.php.

For information about the telecommunications IDIQ contract, see, for instance, Elizabeth Newell, “GSA Lets 29 Firms in on Massive Tech Services Contract,” Governmentexecutive.com, July 31, 2007, http://www.govexec.com/story_page.cfm?filepath=/dailyfed/0707/073107e1.htm.

Some attempts in the Department of Defense have been made to require competition on IDIQ contracts. Congress enacted Section 803 of the National Defense Authorization Act for Fiscal Year 2002. This provision, which applies only to Defense orders exceeding $100,000 for services under IDIQ contracts, requires “fair notice” to contractors holding an IDIQ award before placing an order. The provision is seen by some contract specialists as weak because “fair notice” is defined in the implementing regulations as being satisfied when only three offers are received (see Defense Federal Acquisition Regulation Supplement, § 208.405–70, http://www.dod.mil/dodgc/olc/docs/2002NDAA.pdf). As noted by the GAO (Government Accountability Office Report GAO-04-874, Guidance Needed to Promote Competition for Defense Task Orders , July 30, 2004, Executive Summary, http://www.gao.gov/new.items/d04874.pdf), even these “enhanced” competition requirements were waived by DOD in approximately 50 percent of cases. Ralph C. Nash and John Cibinic report that “There are numerous indications that Contracting Officers are diligent in finding ways to avoid . . . competition . . . In the traditional tug-of-war between ‘customer satisfaction’ (honoring the desire of program and technical personnel to obtain services from knowledgeable and high performance incumbents) and obtaining competition, customer satisfaction appears to be winning by a large margin” (“Competition for Task Orders: The Exception or the Rule?” 18 Nash & Cibinic Rep., 42, October 2004).

Washington Technology, Federal Computer Week , and Government Computer News have either arisen or shaped themselves to fill the government-contractor networking niche.

52. Reporting of task orders on the FPDS is at http://www.fpdsng.com/downloads/agency_data_submit_list.htm. The link to the 2006 report is at http://www.fpdsng.com/fpr_reports_fy_06.html.

Data posting runs a full fiscal year behind and the GAO has complained about this. See http://www.gao.gov/new.items/d05960r.pdf.

53. Like many such consulting firms, CACI has high-powered connections; its board of directors, for instance, has included such bigwigs as Richard Armitage, who went on to become deputy secretary of state under Bush II. Armitage became a CACI director in 1999, when he was a member of the Defense Policy Board. David Isenberg, “A Fistful of Contractors: The Case for a Pragmatic Assessment of Private Military Companies in Iraq,” Research Report 2004.4, Washington, DC: British American Security Information Council, September 2004, p. 39, http://www.basicint.org/pubs/Research/2004PMC.pdf. For information about high-powered individuals associated with CACI, see Ellen McCarthy, “Intelligence Work Comes to CACI Via Acquisitions,” Washington Post , July 8, 2004, p. E01, http://www.washingtonpost.com/wp-dyn/articles/A35630-2004Jul7.html.

The CACI quote is from GAO, Interagency Contracting: Problems with DOD’s and Interior’s Orders to Support Military Operations, United States Government Accountability Office , GAO-05–201, April 2005, p. 14, www.gao.gov/cgi-bin/getrpt?GAO-05-201.

The GAO found that the task orders issued were “beyond the scope of the underlying contract,” while the Inspector General of the Department of the Interior and the General Services Administration similarly determined that 11 of 12 procurements reviewed were “outside the scope” of the contract. See GAO, Interagency Contracting: Problems with DOD’s and Interior’s Orders to Support Military Operations , United States Government Accountability Office, GAO-05–201, April 2005, Highlights and pp. 7–8, www.gao.gov/cgi-bin/getrpt?GAO-05-201; and United States Department of the Interior, Office of Inspector General, Memorandum to: Assistant Secretary for Policy, Management and Budget; From: Earl E. Devaney, Inspector General; Subject: Review of 12 Procurements Placed Under General Services Administration Federal Supply Schedules 70 and 871 by the National Business Center (Assignment No. W-EV-OSS-0075–2004), July 16, 2004, http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?db-name=interior&docid=f:2004-i-0049.pdf.