[Rhodes22-list] Katrina Update

[Bill Effros]

Brad,

Glad to see you responding in your own words, and very tired of the long 
quotes from others.

But this one, from today's NYT, (Ed, ok for you to hit the delete key 
right now) speaks so directly to the topic at hand...:

In Washington, Contractors Take on Biggest Role Ever
By SCOTT SHANE and RON NIXON
February 4, 2007

WASHINGTON, Feb. 3 — In June, short of people to process cases of 
incompetence and fraud by federal contractors, officials at the General 
Services Administration responded with what has become the government’s 
reflexive answer to almost every problem.

They hired another contractor.

It did not matter that the company they chose, CACI International, had 
itself recently avoided a suspension from federal contracting; or that 
the work, delving into investigative files on other contractors, 
appeared to pose a conflict of interest; or that each person supplied by 
the company would cost taxpayers $104 an hour. Six CACI workers soon 
joined hundreds of other private-sector workers at the G.S.A., the 
government’s management agency.

Without a public debate or formal policy decision, contractors have 
become a virtual fourth branch of government. On the rise for decades, 
spending on federal contracts has soared during the Bush administration, 
to about $400 billion last year from $207 billion in 2000, fueled by the 
war in Iraq, domestic security and Hurricane Katrina, but also by a 
philosophy that encourages outsourcing almost everything government does.

Contractors still build ships and satellites, but they also collect 
income taxes and work up agency budgets, fly pilotless spy aircraft and 
take the minutes at policy meetings on the war. They sit next to federal 
employees at nearly every agency; far more people work under contracts 
than are directly employed by the government. Even the government’s 
online database for tracking contracts, the Federal Procurement Data 
System, has been outsourced (and is famously difficult to use).

The contracting explosion raises questions about propriety, cost and 
accountability that have long troubled watchdog groups and are coming 
under scrutiny from the Democratic majority in Congress. While flagrant 
cases of fraud and waste make headlines, concerns go beyond outright 
wrongdoing. Among them:

¶Competition, intended to produce savings, appears to have sharply 
eroded. An analysis by The New York Times shows that fewer than half of 
all “contract actions” — new contracts and payments against existing 
contracts — are now subject to full and open competition. Just 48 
percent were competitive in 2005, down from 79 percent in 2001.

¶The most secret and politically delicate government jobs, like 
intelligence collection and budget preparation, are increasingly 
contracted out, despite regulations forbidding the outsourcing of 
“inherently governmental” work. Scott Amey, general counsel at the 
Project on Government Oversight, a watchdog group, said allowing CACI 
workers to review other contractors captured in microcosm “a government 
that’s run by corporations.”

¶Agencies are crippled in their ability to seek low prices, supervise 
contractors and intervene when work goes off course because the number 
of government workers overseeing contracts has remained level as 
spending has shot up. One federal contractor explained candidly in a 
conference call with industry analysts last May that “one of the side 
benefits of the contracting officers being so overwhelmed” was that 
existing contracts were extended rather than put up for new competitive 
bidding.

¶The most successful contractors are not necessarily those doing the 
best work, but those who have mastered the special skill of selling to 
Uncle Sam. The top 20 service contractors have spent nearly $300 million 
since 2000 on lobbying and have donated $23 million to political 
campaigns. “We’ve created huge behemoths that are doing 90 or 95 percent 
of their business with the government,” said Peter W. Singer, who wrote 
a book on military outsourcing. “They’re not really companies, they’re 
quasi agencies.” Indeed, the biggest federal contractor, Lockheed 
Martin, which has spent $53 million on lobbying and $6 million on 
donations since 2000, gets more federal money each year than the 
Departments of Justice or Energy.

¶Contracting almost always leads to less public scrutiny, as government 
programs are hidden behind closed corporate doors. Companies, unlike 
agencies, are not subject to the Freedom of Information Act. Members of 
Congress have sought unsuccessfully for two years to get the Army to 
explain the contracts for Blackwater USA security officers in Iraq, 
which involved several costly layers of subcontractors.

Weighing the Limits

The contracting surge has raised bipartisan alarms. A just-completed 
study by experts appointed by the White House and Congress, the 
Acquisition Advisory Panel, found that the trend “poses a threat to the 
government’s long-term ability to perform its mission” and could 
“undermine the integrity of the government’s decision making.”

The House Committee on Oversight and Government Reform, whose new 
Democratic chairman, Representative Henry A. Waxman of California, added 
the word “oversight” to signal his intentions, begins a series of 
investigative hearings on Tuesday focusing on contracts in Iraq and at 
the Department of Homeland Security.

“Billions of dollars are being squandered, and the taxpayer is being 
taken to the cleaners,” said Mr. Waxman, who got an “F” rating last year 
from the Contract Services Association, an industry coalition. The 
chairman he succeeded, Representative Thomas M. Davis III, Republican of 
Virginia, earned an “A.”

David M. Walker, who as comptroller general of the United States leads 
the Government Accountability Office, has urged Congress to take a hard 
look at the proper limits of contracting. Mr. Walker has not taken a 
stand against contractors — his agency is also dependent on them, he 
admits — but he says they often fail to deliver the promised efficiency 
and savings. Private companies cannot be expected to look out for 
taxpayers’ interests, he said.

“There’s something civil servants have that the private sector doesn’t,” 
Mr. Walker said in an interview. “And that is the duty of loyalty to the 
greater good — the duty of loyalty to the collective best interest of 
all rather than the interest of a few. Companies have duties of loyalty 
to their shareholders, not to the country.”

Even the most outspoken critics acknowledge that the government cannot 
operate without contractors, which provide the surge capacity to handle 
crises without expanding the permanent bureaucracy. Contractors provide 
specialized skills the government does not have. And it is no secret 
that some government executives favor contractors because they find the 
federal bureaucracy slow, inflexible or incompetent.

Stan Soloway, president of the Professional Services Council, which 
represents government contractors, acknowledged occasional chicanery by 
contractors and too little competition in some areas. But Mr. Soloway 
asserted that critics had exaggerated the contracting problems.

“I don’t happen to think the system is fundamentally broken,” he said. 
“It’s remarkable how well it works, given the dollar volume.”

Blurring the Lines

Wariness of government contracting dates at least to 1941, when Harry S. 
Truman, then a senator, declared, “I have never yet found a contractor 
who, if not watched, would not leave the government holding the bag.”

But the recent contracting boom had its origins in the “reinventing 
government” effort of the Clinton administration, which slashed the 
federal work force to the lowest level since 1960 and streamlined 
outsourcing. Limits on what is “inherently governmental” and therefore 
off-limits to contractors have grown fuzzy, as the General Services 
Administration’s use of CACI International personnel shows.

“Hi Heinz,” Renee Ballard, a G.S.A. official, wrote in an e-mail message 
to Heinz Ruppmann, a CACI official, last June 12, asking for six 
“contract specialists” to help with a backlog of 226 cases that could 
lead to companies being suspended or barred from federal contracting. 
The CACI workers would review files and prepare “proposed responses for 
review and signature,” she wrote.

Mr. Amey, of the Project on Government Oversight, which obtained the 
contract documents under the Freedom of Information Act, said such work 
was clearly inherently governmental and called it “outrageous” to 
involve contractors in judging the misdeeds of potential competitors. 
CACI had itself been reviewed in 2004 for possible suspension in 
connection with supplying interrogators to the Abu Ghraib prison in 
Iraq. The company was ultimately cleared, though the G.S.A. found that 
CACI employees had improperly written parts of the “statements of work” 
for its own Iraq contract.

The price of $104 an hour — well over $200,000 per person annually — was 
roughly double the cost of pay and benefits of a comparable federal 
worker, Mr. Amey said.

Asked for comment, the G.S.A. said decisions on punishments for erring 
contractors “is indeed inherently governmental.” But the agency said 
that while the CACI workers assisted for three months, “all 
suspension/debarment decisions were made by federal employees.” A CACI 
spokeswoman made the same point.

The G.S.A., like other agencies, said it did not track the number or 
total cost of its contract workers. The agency administrator, Lurita 
Doan, who previously ran a Virginia contracting firm, has actively 
pushed contracting. Ms. Doan recently clashed with her agency’s 
inspector general over her proposal to remove the job of auditing 
contractors’ proposed prices from his office and to hire contractors to 
do it instead.

On some of the biggest government projects, Bush administration 
officials have sought to shift some decision making to contractors. When 
Michael P. Jackson, deputy secretary of the Department of Homeland 
Security, addressed potential bidders on the huge Secure Border 
Initiative last year, he explained the new approach.

“This is an unusual invitation,” said Mr. Jackson, a contracting 
executive before joining the agency. “We’re asking you to come back and 
tell us how to do our business.”

Boeing, which won the $80 million first phase of the estimated $2 
billion project, is assigned not only to develop technology but also to 
propose how to use it, which includes assigning roles to different 
government agencies and contractors. Homeland Security officials insist 
that they will make all final decisions, but the department’s inspector 
general, Richard L. Skinner, reported bluntly in November that “the 
department does not have the capacity needed to effectively plan, 
oversee and execute the SBInet program.”

A ‘Blended Work Force’

If the government is exporting some traditional functions to 
contractors, it is also inviting contractors into agencies to perform 
delicate tasks. The State Department, for instance, pays more than $2 
million a year to BearingPoint, the consulting giant, to provide support 
for Iraq policy making, running software, preparing meeting agendas and 
keeping minutes.

State Department officials insist that the company’s workers, who hold 
security clearances, merely relieve diplomats of administrative tasks 
and never influence policy. But the presence of contractors inside 
closed discussions on war strategy is a notable example of what 
officials call the “blended work force.”

That blending is taking place in virtually every agency. When Polly 
Endreny, 29, sought work last year with the National Oceanographic and 
Atmospheric Administration, she was surprised to discover that most 
openings were with contractors.

“The younger generation is coming in on contracts,” said Ms. Endreny, 
who likes the arrangement. Today, only the “Oak Management” on her ID 
badge distinguishes her from federal employees at the agency’s headquarters.

She said her pay was “a little higher” than that of comparable federal 
workers, and she gets dental coverage they do not. Such disparities can 
cause trouble. A recent study of one NOAA program where two-thirds of 
the work force were contractors found that differences in salary and 
benefits could “ substantially undermine staff relations and morale.”

The shift away from open competition affects more than morale. One 
example among many: with troops short in Iraq, Congress in 2003 waived a 
ban on the use of private security guards to protect military bases in 
the United States. The results for the first $733 million were dismal, 
investigators at the Government Accountability Office found.

The Army spent 25 percent more than it had to because it used 
sole-source contracts at 46 of 57 sites, the investigators concluded. 
And screening of guards was so lax that at one base, 61 guards were 
hired despite criminal records, auditors reported. Yet the Army gave the 
contractors more than $18 million in incentive payments intended to 
reward good performance. (The Army did not contest G.A.O.’s findings and 
has changed its methods.)

A Coalition for Contracting

Mr. Soloway, of the contracting industry group, argues that the 
contracting boom has resulted from the collision of a high-technology 
economy with an aging government work force — twice as many employees 
are over 55 as under 30. To function, Mr. Soloway said, the government 
must now turn to younger, skilled personnel in the private sector, a 
phenomenon likely to grow when what demographers call a “retirement 
tsunami” occurs over the next decade.

“This is the new face of government,” Mr. Soloway said. “This isn’t 
companies gouging the government. This is the marketplace.”

But Paul C. Light of New York University, who has long tracked the 
hidden contractor work force to assess what he calls the “true size of 
government,” says the shift to contractors is driven in part by federal 
personnel ceilings. He calls such ceilings a “sleight of hand” intended 
to allow successive administrations to brag about cutting the federal 
work force.

Yet Mr. Light said the government had made no effort to count 
contractors and no assessment of the true costs and benefits. “We have 
no data to show that contractors are actually more efficient than the 
government,” he said.

Meanwhile, he said, a potent coalition keeps contracting growing: the 
companies, their lobbyists and supporters in Congress and many 
government managers, who do not mind building ties to contractors who 
may hire them someday. “All the players with any power like it,” he said.

That is evident wherever in Washington contractors gather to scout new 
opportunities. There is no target richer than the Homeland Security 
Department, whose Web site, in a section called “Open for Business,” 
displays hundreds of open contracts, including “working with selected 
cities to develop and exercise their catastrophic plans” ($500,000 to $1 
million) and “Conduct studies and analyses, systems engineering, or 
provide laboratory services to various organizations to support the DHS 
mission” ($20 to $50 million).

One crisp morning in an office building with a spectacular view of the 
Capitol, Alfonso Martinez-Fonts Jr., the agency’s assistant secretary 
for the private sector, addressed a breakfast seminar on “The Business 
of Homeland Security.” The session drew a standing-room crowd.

Mr. Martinez-Fonts, a banker before joining the government, said he 
could not personally hand out contracts but could offer “tips, hints and 
directions” to companies on the hunt.

Joe Haddock, a Sikorsky Helicopters executive, summed up the tone of the 
session. “To us contractors,” Mr. Haddock said, “money is always a good 
thing.”

Brad Haslett wrote:
> Wally,
>
> Are you a "the glass is half empty" kinda guy when you're out making 
> sales
> calls?
>
> The market is what the market is, and right now it is damn good. My home
> value isn't falling, it wasn't overinflated to begin with. My savings 
> rate
> is still good (having a Chinese wife doesn't hurt) and we're agressively
> paying off debt.
>
> These are personal decisions. I don't want or need a nanny government to
> tell me what to do. Inflation is low, market returns are good, 
> unemployment
> is at record lows (and good help difficult to find) - how much good news
> does one need to cheer up?
>
> But if you really feel that things are bad, buck up! Hillary and Obama 
> are
> on the way with a chicken for every pot! Maybe you're right, W is
> responsible for every little thing that's wrong with every little 
> misery in
> life. Thank goodness for elections, assuming you believe in elections.
> Apparently you don't if you're an Iraqi.
>
> Gone flying, have a nice day!
>
> Brad
>
>
>
>
> On 2/4/07, TN Rhodey <tnrhodey at hotmail.com> wrote:
>>
>> Brad, Comparing Dave to Steve L...either you are joking or your memory
>> sucks. Steve's goal was to insult and attack those who did not agree 
>> with
>> him. I don't think that is true with Dave.
>>
>> Brad I disagree with your rosy fiscal predictions and your slant on the
>> Iraq
>> war. There are more economic indicators than Dow Jones. Debt is at all
>> time
>> high, Savings at all time low, home values dropping for first time since
>> 1930s (Great Depression). We are building a house of cards and wasting
>> billions on this war.
>>
>> Wally
>> >From: "Brad Haslett" <flybrad at gmail.com>
>> >Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>> >To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
>> >Subject: Re: [Rhodes22-list] Katrina Update
>> >Date: Fri, 2 Feb 2007 13:55:03 -0600
>> >
>> >Wally,
>> >
>> >I don't have a lot of time today but I'll take a quick stab at your
>> >question. I stand behind every post and I've been pretty consistent 
>> over
>> >the years. I don't like entitlement programs, don't think most work the
>> >way
>> >they were intended, don't think many were needed in the first place, 
>> and
>> >they seldom end long after the original perceived need is gone. Bush 43
>> >hasn't cut a single domestic entitlement program that I can think 
>> of, and
>> >expanded some that we couldn't afford (think medicare). There is 
>> nothing
>> >inconsistent in my criticism over that. Bush and the Congress had their
>> >heart in the right place over Katrina, but the inefficiencies and 
>> limits
>> of
>> >government have reared it's predictable head. You could double the 
>> amount
>> >of
>> >money appropriated and it wouldn't speed things 10%. Deficit 
>> spending is
>> a
>> >necessary evil at times, and certainly the post dot-com recession and
>> >financial hit from 9/11 warranted deficit spending in my
>> opinion. Nothing
>> >inconsistent about that. Dave's rants reminds me of the old Steve from
>> >Little Rock - one side is all bad and the other is all good. Both 
>> parties
>> >have engaged in deficit spending, sometimes needed, sometimes not, and
>> >neither party owns all the bragging rights on fiscal responsibility. To
>> >think so otherwise is naive. What I took offense to is the thinly 
>> veiled
>> >prejudice that heavy equipment operators, especially ones from
>> Mississippi,
>> >can't think for themselves or have their own opinions. If Dave meant it
>> >differently he can explain himself, but I interpreted it much like
>> Charlie
>> >Rangel's statement, drunk with power three days after the election, 
>> "why
>> >the
>> >hell would anyone want to live in Mississippi". It is more of the same
>> >elitist bullshit, "we know what's better for you than you do yourself".
>> >The
>> >people of the Gulf Coast do need federal assistance, ie, money. They
>> could
>> >also use a lot less interference at the Federal level. More government
>> is
>> >not the solution to the problem, government IS the problem. If you, or
>> >Dave, or anyone else think you have better solutions, you might want to
>> >spend a few days along the coast and and look around first. Guess
>> >what? Islamofascism will still be here in two years and so will the
>> >rebuilding needs on the Gulf. Hillary is already on record for
>> "resenting"
>> >being left with potential problems if she wins, but that's life. If she
>> >can
>> >waive a magic wand, or broom, and make the world's problems go away, 
>> more
>> >power to her. I suspect the sane and rational arguments about what 
>> works
>> >and what doesn't will get lost in the usual class warfare static.
>> >
>> >So let's summarize:
>> >
>> >I don't like entitlement programs.
>> >
>> >I don't like deficit spending (or mortgages or business debt) but
>> recognize
>> >it as a useful tool and necessary evil.
>> >
>> >I don't like politicians (and journalists) making broad sweeping
>> statements
>> >and drawing conclusions about problems they haven't even witnessed or
>> >bothered to study.
>> >
>> >I'll say this one more time - I don't mindlessly agree with either 
>> party
>> or
>> >any one President. However, like Ed Koch, the WOT is our greatest 
>> threat
>> >and by comparison, every domestic issue takes a back seat.
>> >
>> >Wally, if as you imply I waffle on positions then I'm obviously in the
>> >wrong
>> >profession! Maybe I should run for Senator from Massachusetts.
>> >
>> >Everyone is welcome to come to the Gulf and volunteer. They could use
>> the
>> >help!
>> >
>> >I'm going back to work!
>> >
>> >Brad
>> >
>> >
>> >On 2/2/07, TN Rhodey <tnrhodey at hotmail.com> wrote:
>> >>
>> >>
>> >>Brad,
>> >>
>> >>I don't understand your response to Dave. Why would folks from Miss 
>> kick
>> >>his
>> >>ass because of what you said? I am trying my best to stay out of these
>> >>threads but sometimes I can't help myself. I looks to me like you 
>> don't
>> >>want
>> >>to stand behind your posts.....not the first time you have back 
>> peddled.
>> >>
>> >>Dave called it like he saw it.....good call!
>> >>
>> >>
>> >> >From: "Brad Haslett" <flybrad at gmail.com>
>> >> >Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>> >> >To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
>> >> >Subject: Re: [Rhodes22-list] Katrina Update
>> >> >Date: Thu, 1 Feb 2007 21:12:59 -0600
>> >> >
>> >> >Dave,
>> >> >
>> >> >Forgive me for being short, the office is unheated. My operators are
>> >>not
>> >> >in
>> >> >awe of me or too many other people, but I wish you were here. They
>> >>would
>> >> >kick your pompous ass in the first two minutes for your condesending
>> >> >attitude towards them and Mississippi.
>> >> >
>> >> >Brad
>> >> >
>> >> >
>> >> >On 2/1/07, DCLewis1 at aol.com <DCLewis1 at aol.com> wrote:
>> >> >>
>> >> >>
>> >> >>Brad,
>> >> >>
>> >> >>You say I put words in your mouth - I come back with quotes from
>> >> >>your posts.
>> >> >>You say it's word twisting. Read your cited posts, it's pretty
>> clear
>> >> >>what
>> >> >>you wrote.
>> >> >>
>> >> >>You talk about the need for deficit spending to fight the war and a
>> >> >>recession. The post-bubble//9/11 recession started towards the end
>> of
>> >> >>2001 and ended
>> >> >>in 2002(see the first paragraph of
>> >> >>_http://www.fdic.gov/bank/analytical/fyi/2006/032306fyi.html_
>> >> >>(http://www.fdic.gov/bank/analytical/fyi/2006/032306fyi.html) ) ,
>> this
>> >>is
>> >> >>2007. The deficits from tax cuts in the intervening 5 years
>> >> >>have had nothing to do with recession - but I'm sure you knew that,
>> >>just
>> >> >>another half-truth.
>> >> >>
>> >> >>You know darn well these guys have been living on
>> debt forever. Each
>> >>FY
>> >> >>is
>> >> >>always a "special situation" whose unique circumstances require 
>> your
>> >> >>idiot
>> >> >>buddies to run up debt, right? I don't think so. 8 years of
>> "unique
>> >> >>circumstances" with Reagan, followed by 4 years of "unique
>> >>circumstances"
>> >> >>by Bush, and
>> >> >>now 6 years of "unique circumstances" with Jr - gimme a break. Any
>> >> >>public
>> >> >>company that tried this would be trashed and its management in
>> >>jail. Any
>> >> >>private company would be dead broke. But your emotionally aligned
>> >>with
>> >> >>these
>> >> >>idiots so it's OK with you.
>> >> >>
>> >> >>Oh, and as per your post I have kept in mind that the Congress 
>> has to
>> >> >>authorize the egregious deficit spending - and that brings me right
>> >>back
>> >> >>to your
>> >> >>idiot buddies, many of which are no longer in Congress. The
>> electorate
>> >> >>collectively threw up - and your buddies are gone. But you
>> knew that.
>> >> >>
>> >> >>
>> >> >>It would be gratifying to see a little intellectual honesty.
>> >> >>
>> >> >>By all means, go to Mississippi maybe they'll believe you. I'm
>> >>sure your
>> >> >>equipment operators stand in awe of your encyclopedic grasp of
>> >> >>misinformation.
>> >> >>Be sure to tell them about Keynesian economics and the recession of
>> >>2006,
>> >> >>or
>> >> >>5, or whatever, and when they quote you remember to say "I never
>> said
>> >> >>that".
>> >> >>They'll be impressed.
>> >> >>
>> >> >>
>> >> >>Dave
>> >> >>__________________________________________________
>> >> >>Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
>> >> >>
>> >> >__________________________________________________
>> >> >Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
>> >>
>> >>_________________________________________________________________
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>> >>
>> >>
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>> >>
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