For the unions that represent federal employees, Edward Snowden represents a chance to address the extent to which federal functions are contracted to private-sector companies. The notion of a contractor leaking the government’s greatest secrets is jarring, and labor leaders hope it will convince elected officials to reject calls to expand federal contracting.
“There is little that agencies and the public do not know about their civil servants,” said Diana Price, a procurement specialist to American Federation of Government Employees, to Mint Press News. “They know where they are, what they do, how many are in each location performing each function, and how much they are paid. Contracts and contractor employees are shrouded in darkness. Agencies and the public do not know how much contractors cost, how many employees do the work, or whether contractors are performing inherently governmental or critical functions.”
“Government decisions must be made by knowledgeable agency officials based on independent judgments,” Price continued. “This means that agency officials cannot rely solely on advice from contractors, so there must be some in-house expertise. The realities of the federal workplace are such that managers often lack the time and often the expertise to adequately review recommendations and exercises of discretion by contractors. In those cases, the provision of recommendations and exercises of discretion should only be performed by federal employees.”
The outsourcing of federal work — which started under the Reagan administration but accelerated vastly under the Clinton administration’s National Partnership for Reinventing Government — has created a system in which a great deal of the government’s functionality is handled by people not vetted by the federal government to the same degree federal employees are examined. This has became an increasingly poignant point of contention, as the amount of contracting has grown to meet the needs of a rapidly expanding infrastructure.
“I think that this scandal with Booz Allen couldn’t have happened at a better time to expose how bad contracting is now. No government function should be outsourced,” said J. David Cox, senior national president of the AFGE. “We need the administration to step forward and give very, very clear guidance about in-sourcing of work.”
A need for government control of government work
The shock that Snowden was allowed such access, despite glaring shortcomings and causes for alarm, has rattled the Washington establishment and heralded a storm of difficult questions.
“I’m just stunned that an individual who did not even have a high school diploma who did not successfully complete his military service and who is only age 29 had access to some of the most highly classified information in our government,” Sen. Susan Collins (R-Maine) told reporters on the revelation that Booz Allen Hamilton hired Snowden, a high school dropout, and paid him a salary of $122,000 per year.
“That’s astonishing to me, and it suggests real problems with the vetting process,” Collins added. “The rules are not being applied well or they need to be more strict.”
Compared to the roughly 2 million executive branch employees, there were an estimated 7.6 million federal contractors in 2011, according to the Project on Government Oversight. According to a report issued by the Office of the Director of National Intelligence, 483,236 private contractors had top-secret security clearance, compared to 791,200 government employees. In fiscal year 2011, the United States has spent $537 billion on federal contractors.
The federal contracting system has traditionally been marred with corruption and a lack of oversight. According to the Project on Government Oversight, the five federal contractors most liable for misconduct — British Petroleum, GlaxoSmithKline, Merck & Co., Pfizer and Exxon Mobil — have committed 183 counts of fraud and misconduct against the federal government since 1995 at a combined cost of $36.4 billion. In total, 1,254 counts of fraud have been recorded since 1995 at a cost of $59.9 billion.
An example of contractor fraud was spotlighted on Tuesday when Joseph Richards, 52, of Arlington, Va., and David Lux, 66, of Springfield, Va., were sentenced to 27 and 15 months in prison, respectively, for defrauding the government. The men — executives with an unidentified federal security contractor — claimed that their CEO and president was a Black female for the sake of qualifying for a Small Business Administration program. Keith Hedman, 53, the founder of the company, had sole executive authority of the company.
Defenders of the contracting system suggest that the system saves money over the long run. Price argues that in 83 percent of all cost comparisons, public labor is found to be more cost-effective than private labor.
“Contracts are often kept from the public, so that we do not know what contractors are supposed to do, what they are actually doing, at what cost, and to what end,” Price said.
Members of Congress are looking at Snowden’s salary and level of access and questioning whether the contracting system needs reform.
“You would have to be under a rock to not state the obvious,” Sen. Claire McCaskill told Politico. “You have someone who was employed by a contractor for less than three months and has upended a lot of things that, while I can argue that some of the things need more oversight and transparency, the notion that he had access with his profile makes me question a whole lot of things about contractors.”
A call to fix — but keep — the system
Sen. Ron Johnson (R-Wis.) feels that the issue of contracting must be addressed, but also that outsourcing to the private sector should be preserved.
“There needs to be a blend. Businesses approach it the same way,” he said. “If you can produce things internally you do it, but a lot of time you need the specialization and greater skill that you don’t have in your organization. That’s when you contract that out. There’s not a right or wrong answer. It’s not absolute. It’s about comparative advantage.”
Supporters of the federal contracting system argue that the issue of the NSA leak should not be allowed to devolve to a “government versus contractor” issue.
“[There has been] absolutely no slackening in security requirements [and] the vetting process,” Leonard Moodispaw, president of cyber-security contractor KEYW, told The Washington Post. “How a guy like that gets through? He changes his mind. You can’t predict that sort of stuff. We’re all doing self-examination. If something like that had happened to a small company dedicated to the intelligence business and it was our fault — and I’m not suggesting it’s Booz’s fault — we’d go out of business, so that’s why we’ve got to be extra careful.”
“Whether or not a contractor or a civilian is cheaper or better really depends on the circumstances,” said Robert Hale, comptroller to the Pentagon, in a congressional hearing on the need of contracting. “There are some cases where we simply don’t have the skills in the Department of Defense that we need, or it’s a short-term job and it wouldn’t make any sense to grow them.”
“When I was on the Bowles-Simpson Commission, and the Secretary of Defense came to speak, we asked him how many contract employees worked for the Department of Defense, and he said I can’t tell you. I just don’t know,” Hale continued. “I know it sounds bad, but it’s partly true because if you do a fixed-price contract, the contractor has no obligation to tell you how many people are doing it. They just do the work. And if they do it satisfactorily, you pay them. We are in the process now of asking all our contractors, probably at some expense to the government, to tell us how many people, even if it’s a fixed-price contract, so we’ll know better.”
However, even among the supporters, there is a recognition that things can be improved.
“There is little question that there are too many government contractors and not enough controls and safeguards over them,” said David Walker of the Government Transformation Initiative, which pushes for ways the government can grow efficient. “The work of the commission could result in the replacement of certain contractors with government employees. However, civil service reform would be required to attract and retain the full range of professionals the government must access to discharge its many responsibilities.”