Editorial: Not Getting Their Money’s Worth

At first glance, two recent crises to hit the White House — the revelations about unlawful surveillance and the botched health care rollout — have nothing in common. But each is a reminder of the increasing extent to which government work has been contracted out to private-sector companies. Currently, Washington spends about $500 billion a year on private-sector contracts, more than twice the amount in 2000.

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It is hard to argue that Americans are getting their money's worth.

The ostensible purpose of using private contractors is to get jobs done cheaper and better. But that aim is often unmet. Companies bidding for federal work have a financial incentive to overpromise. The complex procurement process gives big companies an edge to win large, long-term contracts, even when the needed expertise, especially in technology, can often be found at smaller, more nimble companies. Federal rules intended to reduce conflicts of interest instead leave government officials with little authority to oversee or terminate contracts.

The result is delays, overruns and unmet public needs. Technological failures are not the only problem. A recent Senate report found that federal contractors are among the worst violators of wage-and-safety laws, while a New York Times investigation found that the government buys clothes from sweatshops in foreign countries.

It is legitimate to use contractors when the government does not possess the expertise, especially on specific projects, or for services that are tangential to core government functions. But the current practice of contracting out vast swaths of government work indefinitely — with little or no attempt to develop the needed technical and managerial expertise within the government or to enforce labor standards — has created a bloated federal-contractor sector in which the public good is often subservient to profit.

Several sensible proposals to reform federal contracting have been put forward, including bipartisan legislation to make a single person at each government agency responsible for technology projects. Some good-government groups have suggested that government analysts systematically evaluate whether contractors provide better value than federal employees and what it would take to develop in-house expertise. Legislators and some labor advocates say President Obama should require government agencies to consider a company's labor and performance record when awarding contracts.

But for all the research and recommendations, nothing much is happening in Congress or the administration, in part because the status quo is lucrative for powerful corporations and big campaign donors, and is entrenched by the revolving door between government agencies and private-sector contractors. Reform will not be simply a technical exercise. It also will be a political battle, one that no one has taken up in earnest yet.

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