by Deb Cupples | Based on a Congressional Budget Office report, today's New York Times reports that our federal government 1) has 180,000+ private contractors in Iraq, more than the number of troops; and 2) has spent more than $100 billion on war-related contractors since the Iraq invasion in 2003 -- an unprecedented level of reliance on private firms.
Given the (oft realized) potential for costliness, waste, and fraud in the contractor-government relationship, the problem may be bigger than what we taxpayers have spent on Iraq-related contractors.
The table after the jump will give you some idea of why I say that.
The table data below is from Government Executive magazine's Top-200 contractors list (including defense and civilian) for the fiscal year 2006-07, ranked from largest to smallest contracts.
Not wanting to make a 200-row table, I included the top 10 and the 200th on the list, with a few in between, to give you an idea of how heavily privatized our nation is. I also rounded off the numbers to save space.
Overall, according to Government Executive, we taxpayers spent nearly $440 billion on contractors during FY 2006 (four times what we spent on Iraq war contractors from 2003-07), and the Top-200 got about $260 billion of it.
| Rank | Parent Comp. | Amt. | Rank | Parent Comp. | Amt. | |
| 1 | Lockheed | $33 billion | ....... | 21 | Health Net | $2.1 billion |
| 2 | Boeing | $23 billion | 35 | FedEx | $1.3 billion | |
| 3 | Northrup Grumman | $19 billion | 41 | Exxon | $1.2 billion | |
| 4 | General Dynamics | $12 billion | 74 | Blackwater | $596 million | |
| 5 | Raytheon | $11 billion | 95 | Abu Dhabi Oil | $494 million | |
| 6 | KBR | $6 billion | 105 | Hunt Building | $435 million | |
| 7 | L-3 | $5.7 billion | 123 | Proctor & Gamble | $356 million | |
| 8 | SAIC | $5.3 billion | 134 | Perot Systems | $137 million | |
| 9 | United Tech. | $5.1 billion | 187 | Delloite & Touche | $197 million | |
| 10 | BAE | $4.7 billion | 200 | Texas Instruments | $188 million | |
Obviously, our government must rely on contractors for goods, because Uncle Sam doesn't make computers, cars, pens, drugs, etc. We also must rely on contractors for many services -- though certainly not all.
Consider Delloite & Touche (#187 on the table), a firm that provides accounting and consulting services. The government gave that firm nearly $200 million in contracts last fiscal year.
The big question: would we taxpayers have saved money by instead hiring inside staff to provide the same services? Frankly, I don't know the answer, as I haven't looked at the contracts or invoices.
What I do know is this: every dollar that we spend on a private contractor's profits and mark-ups is one less dollar to fill our nation's needs.
Bill padding, waste, and fraud only increases our potential losses from hiring contractors. I'm not saying that all contractors pad bills, waste money or defraud us taxpayers, but many certainly have -- and in big ways. (Examples are here.)
Given what I've learned about government contracting over the last few years, I have one conclusion -- though it's not solid: we taxpayers might get the same goods and services for considerably less money if our government --
1) Stops relying so heavily on contractors
2) Starts negotiating better with the contractors we do hire
3) Starts adequately monitoring our contractors.
My wish is that our nation's officials would seriously study the cost effectiveness of many of our bigger contractual arrangements -- and that our media would make far more of this issue.
Regarding the high costs of contracting (and the potential for waste, fraud and abuse), check out some of the posts linked below. If you're interested, Government Executive has a Top-200 list for the 2005-06 fiscal year, too.
Memeorandum
has commentary.
Related Buck Naked Politics Posts
* High Cost of Private Contractors
* IRS Contractors Cost More than They Collect
* Defense Dept. Rewarding Bad Contractor Performance?
* Insurance Companies Get Away with Overbilling Medicare
* Contractor Fraud: Driving up Health Care Costs
* U.S. Embassies: Still More Examples of Problems with Contractors
* Contractor UNISYS in Trouble Again
* How KBR Got $1 Billion in Non-Credible Costs
* Blackwater Took Iraqi Airplanes, CEO Misled Congress?
* Bush-tied Saudi Fugitive Gets $80 Million Contract
* Contractor Supplies Bad Ammo, Gets Hundreds of Millions
* "Billions over Baghdad": Poor Oversight Enabled Waste/Fraud
* Inspector General Blocked Investigations re: Waste and Fraud?
* Justice Dept. Official Turned Blind Eye to Contractor Fraud?
* Construction Contractor Takes Millions, Fails to Finish Buildings
*Administration Warned about Using Security Contractors in Iraq
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