MANAGING THE MONEY
If Spending Is Swift, Oversight May Suffer
Monday, 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.
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: 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.
"You can't have both," said Eileen Norcross, a senior research fellow at George Mason University's Mercatus Center who studied crisis spending in the aftermath of Hurricane Katrina. "There is no way to get around having to make a choice."
The government's mounting procurement problems can be traced to the Clinton and Bush administrations. 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.
The government's watchdog infrastructure, including inspectors general, also will face new challenges. The House and Senate bills each include about $200 million in additional funding for inspectors general. But some observers say that may be insufficient given the demands.
Some supporters of the stimulus in Congress acknowledge the problems. Sen. Claire McCaskill (D-Mo.) said she has no doubt the Obama administration desires accountability and transparency. To achieve that, she has proposed spending more on contracting workers, investigators and auditors -- including about $60 million to hire about 600 more acquisition workers.
"We have to beef up the acquisition personnel and the resources of the inspectors general or you cannot get to accountability," she said. "This bill isn't cheap, but it will cost us far more in the long run if we don't do this right."
White House spokeswoman Jennifer Psaki declined to answer specific questions about problems with the acquisition system.