I came in this morning to find my inbox (well, it was actually my Google RSS Reader, but saying inbox sounds better) deluged with more stories about contractor malfesence. A quick rundown for our BudgetBlog readers:

The Wall Street Journal reports that MVM Inc., one of the largests security contractors used by the U.S. intelligence community, has lost a huge CIA contract - worth up to $1 billion over five years. Apparently they were not providing enough armed security guards, which is strange because that was, you know, what they were contracted to do.

Robert O'Harrow Jr. writing at Government Inc. shares some fascinating facts about the use of contractors in the U.S. intelligence community, including the fact we are paying over $3 billion more each year on average for private contractors to carry out intelligence work than if we just hired more government workers. Shocker! (O'Harrow also highlighted a new Government Accountability Office report on August 15 that detailed the 400 percent (yes, I said 400 percent) markup on a contract to provide the next generation of radios for the Defense Department.)

And the darling of the contracting community KBR Inc., was back in the news today in the Washington Post, again not for a good reason. A Washington law firm has filled suit in a federal court in California alleging that KBR and one of its Jordanian subcontractors were trafficing Nepali workers. From the Post article:

Agnieszka Fryszman, a partner at Cohen, Milstein, Hausfeld & Toll, said 13 Nepali men, between the ages of 18 and 27, were recruited in Nepal to work as kitchen staff in hotels and restaurants in Amman, Jordan. But once the men arrived in Jordan, their passports were seized and they were told they were being sent to a military facility in Iraq, Fryszman said.

As the men were driven in cars to Iraq, they were stopped by insurgents. Twelve were kidnapped and later executed, Fryszman said. The thirteenth man survived and worked in a warehouse in Iraq for 15 months before returning to Nepal.

My favorite part of that article is right at the end when a KBR spokeswoman says, "The company in no way condones or tolerates unethical or illegal behavior." Sure. And I've got a bridge to sell you.

Update:
The folks over at TPMMuckraker dove into the specifics of the lawsuit brought against KBR today and have posted more details.

Last week I wrote on the BudgetBlog about a new Taxpayers for Common Sense (TCS) analysis detailing the status of earmark in the FY 2009 House and Senate appropriations bills to date. I wrote at the end of the post that cutting earmarks does not save "any" money, which as it turns out, isn't exactly true.

Steve Ellis from TCS wrote a helpful email I'm republishing here with his permission. Steve helps to clarify where/when savings are possible from cuts in earmarks.

Hey Adam,

Hope you are well. Thanks for the plug of our interim earmark report on your blog. Not to be too niggling, but I wanted to make a friendly suggestion - your kicker comment about cutting earmarks doesn't save "any" money is not accurate. The FactCheck story you link to says it would save "little." Of course that depends on how you define little.

Our analysis found $18.3 billion congressional earmarks last year, and as we and others have indicated, in many cases these are just divvying up a spending pie that already exists. But not always. Large and small amounts of money are added to earmark pots and if the earmarks were eliminated that funding would go away. Particularly in defense you can see plus ups across [Research Development Test & Evaluation] — and that bill contained $7.9 billion worth of congressional earmarks last year.

And none of this gets to the indirect cost — money going to wasteful projects, less money going to worthy or critical projects, delaying completion and increasing costs, etc. And that doesn't touch the corruption aspects, opportunity costs, failed oversight, bad products (the most clear-cut example of bad products is the Rep. Wu (D-OR) earmark that got synthetic shirts for Marines that melted to their bodies in the heat when their armored vehicle was attacked).

Anyway, I just wanted to highlight that cutting earmarks can save money, it just isn't as simple as 1 to 1, but it's not 1 to 0 either.

I'm still not convinced that the actual savings Steve is talking about is more than a couple of billion a year, which in a $3 trillion budget is really nothing to get too excited about (I know, a billion here, a billion there, and pretty soon we're talking about real money). But Steve makes a great point about the indirect costs. Not only is there a monetary opportunity cost to an inefficient system that funds the wrong projects and services, but it also undermines the trust the public has in our government to provide for the common good.

The Federal Diary column in the Washington Post this week asked each of the presidential candidates a series of questions related to the federal workforce. Both columns are worth a quick read if you want to learn more about the candidates (see McCain and Obama), but I wanted to highlight one question in particular. Joe Davidson asked each candidate, "Federal labor leaders complain that outside contractors perform jobs that should be done by government employees. Do you favor any suspension of contracting out activities? Do you favor legislation that would prohibit the IRS from using appropriated funds to hire private tax collectors?" Below are their responses.

McCain:

If programs have a good record, and serve a vital national purpose that the private sector can't, they will receive continued funding. But I will not subordinate my commitment to the American people to ensure their tax dollars are spent wisely to the demands of labor leaders looking to swell the ranks of federal government unions.

I will make every aspect of government purchases and performance transparent. Information on every step of contracts and grants will be posted on the Internet in plain and simple English. We're not going to hide anything behind accounting tricks and bureaucratic doubletalk. Nor will I allow other procurement tricks that divert funds from national priorities. I will expand the use of fixed-price contracts to enforce discipline in the procurement process and ensure that clearly defined requirements are fulfilled, realistic schedules are kept, and costs don't exceed the promised price.

Too often, contractors underbid to 'buy into' a market with little expectation of delivering on schedule and within budget. At the same time, the government's cost estimates are often unrealistic. Fixed-price contracts based on realistic cost estimates with clear, consistent requirements will ensure that the contractor pays for cost overruns, not the taxpayers. We must also limit sole-source contracting and make cost discipline a priority using market competition to keep costs down and innovation up.

Obama:

Sen. Obama is concerned by the rising number of government contractors that are often unaccountable and frequently less efficient than government workers. As president, Obama will restore effective oversight of the government-contracting process and reduce our nation's increasing dependence on private contractors in sensitive or inherently governmental functions. Obama will eliminate the Bush administration's ideological bias towards outsourcing of government services and abandon initiatives, like the inefficient use of private bill collectors to collect federal taxes, that are a demonstrated waste of taxpayer money.

OMB Watch is a 501(c)(3) and does not participate in activities that support or oppose candidates for public office. This information is presented solely for informational purposes.

Taxpayer for Common Sense, the scrappy nonprofit that is fast becoming the go-to resource for all things earmarks, released a new analysis earlier this week showing that earmark levels have dropped slightly in the FY 2009 appropriations bills compared to last year. From the TCS report:

During this election year, lawmakers are showing slight restraint in writing the earmarks in the FY 2009 spending bills, according to an analysis by Taxpayers for Common Sense (TCS) (click here for the new database). The House has increased the number and value of earmarks at about the same rate. The Senate has cut earmarks by 16% in the spending bills in terms of total dollars. The analysis is based on all the bills that have passed full committee and are awaiting action in both chambers.

The appropriations bills are not complete yet (far from it) and TCS warns that lots could change. In fact, they state the FY 2009 spending bills may end up with more earmarks because of how the bills are likely to be enacted:

The slight progress made on reducing the total costs of earmarks will be eliminated the longer we wait to pass the 2009 spending bills. The most likely scenario is a major omnibus spending bill during the first days of the 111th Congress. So any earmark reductions we are seeing in August are likely to be negated by an avalanche of earmarks that always accompanies major omnibus spending bills.

At least legislators running for re-election can say with a straight face they are trying to reduce earmarks. I suppose that's better than them claiming that cutting earmarks saves any money. It doesn't

The OMB Watch Fiscal Policy Program is looking for an intern for the fall of 2008. Yup, that's right. This is your chance to get in on the ground floor at one of the most dynamic nonprofit watchdog groups in Washington, DC. We're looking for energetic undergraduate or graduate students who have excellent writing, critical thinking, and communications skills, and who are dedicated to public policy and government accountability (see current intern Josh at right for example).

The internship is unpaid, but you'll have the chance to gain first hand experiences and take on significant responsibilities related to a number of different aspects of policy analysis in DC. Plus, you'll get a chance to write for the BudgetBlog - what could be better?

Interested? Learn more about the position and how to apply.

It's been a slow day here at the Budget Brigade, so I thought I'd bring your attention to the lastest round of quarterly "scores" agencies receive on the President's Management Agenda (PMA) scorecard. These scores measure the implementation of the PMA, or how well the major agencies are "executing the five government-wide management initiatives." Robert Brodsky from Government Executive Magazine has a rundown of the latest scores, which are not too good:

Many federal agencies have taken a step backward on the Bush administration's five major management initiatives, according to quarterly grades released on Thursday by the Office of Management and Budget.

There were 14 downgrades on the status section of OMB's management score card for the third quarter of 2008, which ended June 30. And there were only six instances in which grades improved.

The problems were limited to two areas of the President's Management Agenda: human capital and electronic government.

Clay Johnson, OMB's Deputy Director for Management, cautioned that the "scores" shouldn't be seen as "scores," but as opportunities for improvement.

"The score cards aren't about compliance or getting to a score -- it's about results that agencies are producing," Johnson said. "So, a dip in a score shouldn't always be viewed in the negative, but as a way to [make] progress and improve effectiveness."

Hmmmm...

P.S. For all you home-gamers out there, the administration's "competitive sourcing" initiative has been renamed to the new and improved Commercial Services Management initiative. Same waste of money, great new name.

Most of the popular/mainstream commentaries about Congress is that they don't their jobs - that they need to do more for the American people. We certainly have been highly critical of Congress for repeatedly not getting enough work done during the year by repeatedly failing to pass the most basic legislation that is required of them - the annual budget resolution and appropriations bills (see here, here, and here).

Which is why a post by Jim Harper over on Cato's blog caught my eye the other day. According to Harper, Congress introduced its 10,000th bill on July 30, right before they skipped town for the August recess. The 110th Congress is on pace to break the all-time record for number of bills introduced (10,537) set by the 109th Congress from 2005-2006.

The current Congress is on pace to easily beat the record 10,537 bills introduced in the 109th Congress. In the 109th (2005-2006), the 10,000th bill was introduced on September 18th, well after the August recess.

The number of bills introduced in each Congress has been rapidly increasing over the last twelve years. In the 104th Congress (1995-1996), there were 6,542 bills introduced. In the 105th (1997-1998), 7,529. The 106th (1999-2000), 107th (2001-2002), and 108th (2003-2004) saw bill introductions in the high 8,000s, and in the 109th (2005-2006), the number of bills first pierced through 10,000.

So, if I'm doing my math right, and I like to think I am, the number of bills introduced by Congress has increased 61 percent since the 104th Congress in 1995/1996. Yet there haven't been any additional members of Congress over that period - it's still 535 (plus 5 territorial representatives). So, one way of looking at it is that our legislators have increased their output from 12.11 bills per session to 19.51 bills per session. Talk about getting your money's worth for all you political contributors out there.

Yet the timeliness and quality of the bills Congress actually enacts has sharply decreased during that time. Congress hasn't enacted all of the annual appropriations bills on time since 1994 and as a country we're in more debt now than ever before, having added $4.23 trillion to the national debt in just the last 8 years. It seems this is a situation where less really is more.

Lurita Doan is back in the news. I know, I can't believe it either. But wait until you hear why and what she is saying now. It seems she is headlining a 15-minute segment on Federal News Radio (1050 AM in DC) where she will share her views on, get this, government leadership. I'm not making this up. That's like having Jack Abramoff lecture on ethical/legal congressional fundraising tactics. The segment, entitled "Leadership Matters," will run at 7:28 am on Tuesday mornings, according to this Federal Times article from last week.

Doan's got a snappy new photo (at least I think it is new) up on the Federal News Radio Leadership Matters website and she's gotten through two segments so far, both of which have some unbelievable jewels that I would be remiss if I didn't ridicule.

The first commentary was on business "guru" Peter Drucker and how to institute cuts to government programs, I mean management reform. The first thing about this commentary is that it seems Doan really believes government is a business. While there at least could be an argument that the General Services Administration, the agency she used to run, should be structured like a business, government is not a business. It isn't. Citizens are not "customers." And pretending these things are true and assuming you can apply successful business practices to government and things will work just fine isn't a good idea. For example, Doan says:

But with a little more Drucker, leaders at all levels can see the wisdom of taking the harder road of moving resources, both financial and human capital, to where they can bring the most value, to redeploy these resources to programs that offer the biggest possible value to American taxpayers, and terminating programs that have continued for years even thought they no longer deliver the originally promised results.

I almost don't know where to being here. This is just too ironic. Let me give it a shot - as Ms. Doan says, nothing happens until you commit to it.

Doan tried to "move resources" to where they can bring the "most value" while at GSA. She interfered twice with contract proceedings while heading up the agency, first to give a no-bid contract to her friend (see here and Washington Post coverage), and then to force the government to continue a contract with Sun Microsystems after evidence had been uncovered that Sun was overcharging the government (see here, here, and this excellent Washington Post coverage).

Doan also tried to "redeploy" resources away from the GSA Inspector General's office, a practically unprecedented move in government, because she was tired of that office launching investigations into her pretty blatant misconduct at GSA Administrator (see here, here and here). After being widely criticized for these actions, Doan fell back on the claim she was simply trying to cut the GSA's budget and save taxpayers money. Is this the type of cuts Doan is thinking of when she recommends the new administration "[put] the responsibility for cutting the budget squarely on the shoulders of each agency head" later in her commentary?

Finally, Doan went so far as to break federal law by attempting to use federal resources (both "financial" and "human") to help elect Republicans to federal office. (see here, here, here, and yet more Washington Post coverage).

None of these decisions were "wise," nor did they "bring the most value" to American taxpayers. Maybe that's why President Bush, of all people, ended up firing Doan with only a few months left in his presidency. You know things are bad when Bush won't stand up for you - case in point - he's still campaigning for indicted Sen. Ted Stevens (R-AK).

I'll have to save my reactions to Doan's second commentary for another post - there was just too much to say about the first. One final note. Doan references that there are "barely ten days" to accomplish a more disciplined federal budget at the very end of her commentary. I have no idea what ten days she is talking about here. If you have an idea and can help me out, shoot us an email at budgetblog (at) ombwatch.org.

(h/t to Neil Gordon over at POGO's blog)