NCPA - National Center for Policy Analysis


February 9, 2009

The Obama administration's economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.

For example:

  • The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures.
  • At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.
  • But under the terms of the stimulus proposals, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight.
  • Auditors would be asked to track surges in spending on projects ranging from bridge construction and schools to research of "green" energy and the development of electronic health records -- a challenge made more difficult because many contracts would be awarded by state agencies.

The stimulus plan presents a stark choice, says the Washington Post: The government can spend unprecedented amounts of money quickly in an effort to jump-start the economy or it can move more deliberately to thwart the cost overruns common to federal contracts in recent years.

The government's mounting procurement problems can be traced to the Clinton and Bush administrations, explains the Post.  Both decided to rely far more on the private sector for technology, personnel and other services, greatly increasing the value and complexity of the contracts.  At the same time, the personnel that awarded and oversaw that work was reduced in the 1990s in efforts to downsize the government:

  • Since 2000, procurement spending has soared about 155 percent to almost $532 billion while the growth in the acquisition workforce has fallen far short, rising about 10 percent.
  • Specialists say the raw numbers understate the challenges facing the 29,000 federal contracting personnel in civilian agencies across the government who will be asked to shoulder the burden of stimulus-related contracts.
  • That's because much of the work they do now involves contracts for services, which are harder to issue and monitor than simply buying pencils and chairs.

Source: Robert O'Harrow Jr., "If Spending Is Swift, Oversight May Suffer; Plan's Pace Could Leave Billions Wasted," Washington Post, February 9, 2009.

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