Federal Government's No-Bid Contracts Receive New Attention

Rep. Henry Waxman (D-California) is at it again. The chairman of the House Oversight Committee on Tuesday released a report looking into lucrative no-bid contracts the federal government doled out last year. The report, which critics immediately branded as a partisan attempt to tar the Bush administration, looked into several "worrisome trends," among them:

"For the first time, (1) annual federal procurement spending crossed the $400 billion threshold, (2) more than half of this spending — over $200 billion in new contracts — was awarded without full and open competition, and (3) the total value of wasteful federal contracts now exceeds $1 trillion."

The "More Dollars, Less Sense" report uses data from Eagle Eye, a company that maintains an extensive federal procurement database, and it takes aim at the Bush administration, which promised fiscal conservatism and small government but has seemingly embraced the opposite. Since 2000, the government has dished out colossal amounts of cheese to an increasingly select group of companies, according to the report.

The 20 largest federal contractors received 38 percent of the contract dollars awarded in 2006. No surprise, the Defense Department has seen a major uptick in spending. In 2001, DOD spent $133.5 billion on federal contracts. In 2006, spending was up to $297.7 billion, an increase of 123 percent. The Department of Homeland Security has also seen its payouts balloon. In 2003, the first year after DHS was formed, the agency spent $3.5 billion on federal contracts. In 2006, spending had grown to $15.1 billion, an increase of 337 percent.

If you want to read a story that drills down on DHS over-spending, here's a front-pager from today's WaPo, which probes a no-bid contract with Booz Allen that DHS's own lawyers described as "grossly beyond the scope" of the contract.

More details from the Waxman report:

"The top six recipients of federal contracts are Lockheed Martin,
Boeing, Northrop Grumman, Raytheon, General Dynamics, and Halliburton.
Collectively, they received $99.9 billion in 2006, 24% of all federal procurement spending....The fastest-growing major federal contractor during the Bush Administration has been Halliburton, the company formerly headed by Vice President Cheney. In 2000, Halliburton was the
28th largest contractor, receiving $763 million in federal dollars. By
2006, the company had leaped to the sixth largest federal contractor, receiving over $6 billion in federal dollars. This is an increase of
700% over the six year period."

In 2006, for the first time, the federal government gave out more money in no-bid or limited competition contracts than it did in contracts with open competition, according to the report. The House Oversight majority staff that compiled the report also claimed to have reviewed over 700 different reports from government auditors and investigators. The committee determined that fraud and waste have also been a major problem under the current administration. The Waxman report identified
187 contracts valued at $1.1 trillion that have "been plagued by waste, fraud, abuse, or mismanagement" over the last six years.