Joe Davidson's Federal Diary

By Joe Davidson
Wednesday, December 10, 2008

If you think of well-paid, highly skilled people like brainy engineers at Lockheed Martin or tough Blackwater gunmen in Iraq when you hear the phrase "government contractors," think again.

Many contractors do grunt work and don't get paid much for it, says a report by the Center for American Progress Action Fund. These people wash laundry, drive buses and dish food. They are rent-a-cops, janitors and laborers. They have titles of waiter, cook and cashier.

According to authors David Madland and Michael Paarlberg, low-wage federal contracting jobs are a widespread problem and include about 80 percent of contracted service workers. "Instead of helping to create quality jobs," they write, "all too often the federal government contracts with companies that pay very low wages and treat their workers poorly."

As a result, the taxpayer gets what the bosses pay for -- not much.

"Without decent wages, benefits, and working conditions, work quality can sometimes suffer due to high turnover, inadequate training and experience, and low morale. And when contract workers are poorly compensated, taxpayers often bear additional costs, such as for Medicaid and food stamps, in effect subsidizing low-road companies," the report continues.

But what the taxpayer does pay adds up to quite a bit -- $25 billion in 2007 for four types of contracts: utilities and housekeeping, property maintenance and repair, clothing and apparel, and food preparation.

Stan Soloway, president of the Professional Services Council, which represents contractors, said the report makes "valuable recommendations that could help improve federal contracting," including placing "greater emphasis on 'best-value' as opposed to 'low-bid' contracting."

But he's not happy with the report's tone and some of its data. Soloway doubts, for example, the 80 percent figure because, he said, professional services is the largest contracting category. Information technology and research and development work, gigs not populated by the poorly paid, also are big categories, he said. He also noted that the Service Contract Act requires employers to pay wages and benefits that are not less than those in the local market.

Despite Soloway's misgivings, the report takes on added significance because it comes from the Center for American Progress just weeks before Barack Obama becomes boss-in-chief. The center is run by Obama's transition co-chairman, John D. Podesta. Melody C. Barnes, who will be director of Obama's Domestic Policy Council, was an executive vice president at the center. Thomas A. Daschle, a distinguished senior fellow at the center and formerly the Senate's Democratic leader, is the president-elect's choice to run the Department of Health and Human Services.

Similar to the role the Heritage Foundation played during the Reagan administration, the Center for American Progress has emerged, as my colleague Michael A. Fletcher wrote in Sunday's Washington Post, as "a Democratic government in waiting."

Obama promises a new policy toward contractors, who have flourished under the Bush administration. Citing government data, the report says Washington spent $436 billion on contracts in 2007, more than twice the 2000 figure. During a campaign speech in Green Bay, Obama promised to "save billions of dollars by cutting private contractors and improving management of the hundreds of billions of dollars our government spends on private contracts."

There's been no shortage of complaints about contractors, particularly from federal employees and their union leaders, who strongly supported Obama. They often cite a lack of agency supervision. That's an issue for the authors of the report, too.

"The government's lack of knowledge about the contracted workforce is shocking and unacceptable," they wrote. "Information about contractors -- and especially their subcontractors -- is veiled behind layers of lax oversight, inadequate record keeping, and unnecessary secrecy."

Situations like this are a byproduct of anti-government attitudes that say, as Ronald Reagan did, "government is the problem." That view didn't start with Reagan. Expounding the virtues of contracting has been fashionable since the Carter administration, according to a Rand Corp. paper. Author Bernard D. Rostker says "the 'attack' on government has taken a number of paths, including . . . increased demands to privatize the provision of services traditionally provided by government."

Now the center's report shows us that many of the troops in this attack are poorly paid pawns. It can be found at

Contact Joe Davidson at

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