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Wednesday, May 28, 2008
Pentagon IG Report Exposes Cost of Contracting
The good folks at POGO have come into the possession of one Defense Department Inspector General's report published in March of this year.
This report was at the center of a congressional hearing that was commented on by Stan Collender in a blog post (and WaPo story) we flagged yesterday.
And according to the report:
The rapid growth of the DoD budget since 'FY 2000 leaves the. Department increasingly more vulnerable to the fraud, waste, and, abuse that undermines the Department's mission. At the same time, our ability to adequately cover high-risk areas and Defense priorities has become strained due to the fact that our staffing levels have remained nearly constant during this period while the nation's annual defense costs have grown from less than $300 billion to more than $600 billion.
The report underscores the fact that as fantabulous as privatizing government may appear to be (with the Magic of the Market® and all), it requires a certain level of oversight or money starts getting disappeared. This nontrivial cost of oversight is all to often overlooked (intentionally and not) by proponents of outsourcing and privatization. While outsourcing government work to private firms may save a few bucks, it's entirely possible that the cost of oversight -- either of hiring contract officers or of "lost" funds -- exceeds the benefits.
Posted by Craig Jennings
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