No one really knows, but the first step in figuring it out is to identify what the current ratio of feds to contractors is. And that's exactly what federal agencies, excluding the Department of Defense (DOD), will undertake in the spring according to a recent Office of Federal Procurement Policy (OFPP) memorandum. The analysis will help government agencies determine if they're getting the taxpayers' money worth out of contractors.

Federal News Radio is reporting that agencies will first have to inventory all of their service contracts; a procedure they will have to continue on an annual basis. The first cataloging of each agency's service contracts is due by the end of this year. The administration plans to release the information by Jan. 30, 2011.

Agencies will then have until the end of June 2011 to determine the current ratio of federal employees to contractors throughout various service sectors. According to Federal News Radio, "Federal officials should focus on professional and management services and information technology support services first, but also keep an eye on functional areas that their agency may be relying too much on contractors."

The latter includes, "policy review and development services, program evaluation services, intelligence services, systems engineering services, personal services contracts, automatic data processing support services and automated information systems services."

In addition to examining the current ratio of government employees to contractors, federal agencies are supposed to examine if they are over-relying on contractors or if contractors are performing inherently governmental or closely associated tasks, which the Obama administration clarified in a policy letter released earlier this year.

If an agency finds an inappropriate ratio or contractors performing tasks they shouldn't be, officials have until the end of next year "to report any actions taken to convert positions from contractors to federal employees."

The administration will also gradually require the service contract inventories to provide more detailed information on an agency's use of contract dollars, including "the number of first tier subcontractors, total dollar amount spent on services and how agencies are using service contracts to meet their mission." One can only assume the federal government will provide this information to the public as well.

Most interestingly, this inventory process, according to OFPP, will set the stage for getting a total headcount of government contractors, which many transparency and good-government advocates consider the Holy Grail of government contracting information.

Image by Flickr user Mykl Roventine used under a Creative Commons license.

The pullout of the final U.S. combat brigade from Iraq last week was the penultimate step in the military's withdrawal from the country at the end of 2011. At that time, the State Department, utilizing a large number of private security contractors (PSC), will take responsibility for performing many of the tasks the Department of Defense (DOD) has been carrying out. Problem is, State isn't very good at overseeing contractors.

There are roughly 19,000 private security contractors working in Iraq, mostly performing static security at bases and embassy facilities, or moving security in motorcades and convoys. Approximately 14,000 of those PSCs work for DOD, while State and the U.S. Agency for International Development (USAID) employ some combination of the remaining 5,000.

Not only will State inherit all 19,000 PSCs, the agency estimates it will need another 6,000 to 7,000 contractors to carry out its responsibilities. Preparations for the changeover, according to a recent New York Times piece, have been under way for months, as the military has identified more than 1,200 specific tasks "to be handed over to the civilians, transferred to the Iraqis or phased out."

Private security contractors, acting through the State Department, will continue to provide standing and moving security, and the training of Iraqi police and soldiers, but they will also have to supply quick reaction combat teams, route clearance, recovery of wounded personnel, removal of damaged vehicles, and the detection and disposal of explosive devices.

Unfortunately, the PSCs, like the State Department, lack experience in performing many of these tasks. This may create a nightmare scenario where the State Department, due to lack of experience and too few oversight personnel, can't adequately oversee contractors tasked with new and difficult duties to perform; not helpful to a fledgling democracy.

A recent Commission on Wartime Contracting (CWC) hearing revealed the inadequacies of the State Department's oversight capabilities. State will oversee its tens of thousands of PSCs through its Bureau of Diplomatic Security, which comprises a whopping 1,800 officers, only 800 of who are overseas at any one time. Mind you, that's throughout the entire globe, so Iraq gets a fraction of those personnel.

An overreliance on contractors not only creates an environment ripe for conflicts of interest, but a lack of oversight breeds corruption and increases the chances of a significant event occurring, which would likely incur civilian casualties, that mars the reputation of the United States.

Moreover, while few government officials will cede that contractors are performing inherently governmental tasks in Iraq and Afghanistan, though they are, the State Department's plan to so heavily rely on contractors would only increase the occurrences of PSCs carrying out supposedly government-only duties.

If you thought we had problems with contractors when the Pentagon was running the show, get ready for things to turn really bad if the State Department can't get its act together.

Image by Flickr user The U.S. Army used under a Creative Commons license.

If you haven't been reading the Washington Post's new series "Top Secret America" on the state of the intelligence community since 9/11, I highly recommend checking it out. William Arkin, one of the authors of the series, gave an interview this morning on "Washington Journal," C-SPAN's morning call-in program. Discussing today's piece on the extensive use of contractors in intelligence work, Arkin found placing "the functions of a third of our government in the hands of private companies" to be a "fundamental issue" that the public must grapple with.

The reasons for this are clear:

What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest – and whether the government is still in control of its most sensitive activities.

Anyone that's been following this blog knows that contractors, despite federal laws to the contrary, routinely perform inherently governmental functions in a hidden and unwieldy environment that makes oversight difficult.

During his interview, Arkin went over some overwhelming statistics on contractors in the intelligence world that he and Dana Priest, the other author of the series, uncovered through their investigation:

• Of the 854,000 individuals with top-secret clearances, 265,000, or nearly a third, are contractors.
• The government contracts out with 1,931 private companies to work on programs related to counterterrorism, homeland security and intelligence.

The difficulty in subduing the boom in outsourcing that has occurred over the last nine years in both the intelligence and military worlds – which heavily overlap – is immense. Much of this is attributable to the self-perpetuating nature of the use of contractors. As Arkin observes, "[contractors] are never going to step forward to say, 'We don't need to do what we're doing,' or, 'We need to do less.'"

Of course, there are also those within government that like the ever-increasing budgets that the national security state receives. David Axe, a seasoned war correspondent, commented this morning over on his blog War is Boring that the Post's report evokes Boston University Professor Andrew Bacevich's recent book, The Limits of Power. Bacevich, a former officer in the Army, writes:

The national security state perdures. It does so not because its activities enhance the security of the American people, but because, by its very existence, it provides a continuing rationale for political arrangements that are a source of status, influence and considerable wealth.

I think one could make a similar argument about the contracting industry the Defense Department animates with billions of dollars every year.

The Post's series seems to be creating quite a stir within Washington, and maybe it will give a little more urgency to Congress to better reform the issue of inherently governmental. It's not as if the subject isn't serious enough, as "contractors...are fundamentally involved in matters of national security from intelligence analysis to manning watch and command centers to actually being out there in the field pulling the trigger on guns."

Image by Flickr user johnsolid used under a Creative Commons license.

The Federal Times had an interesting piece last week on the contracting industry's reaction to a recent notice in the Federal Register seeking input on "how best to amend the Federal Acquisition Regulation (FAR) to enable public posting of contract actions." Despite the FAR Councils' stated efforts to post contracts "without compromising contractors' proprietary and confidential commercial or financial information," industry executives are beside themselves over such a monumental change. Not surprisingly, their arguments against the idea don't hold much water.

It seems the FAR Councils are reading the proverbial handwriting on the walls when it comes to the Obama administration's transparency efforts, and have issued an advanced notice of proposed rulemaking "should [public] posting become a requirement in the future." Scott Amey over at the Project on Government Oversight (POGO) posted a good overview of the issue back when the notice came out.

Following up on the issue, the Times decided to check in with contracting experts, including leading industry executives, to gauge their reaction to the effort. What was the executives' biggest concern? Naturally, it was the potential for releasing confidential information.

Larry Allen, president of the Coalition for Government Procurement, argued, "[I]f the government makes a mistake about releasing confidential information under a Freedom of Information Act (FOIA) request" – currently the only way for the public to obtain contract records – "the damage...is fairly limited." Allen contrasted this with the government unintentionally posting proprietary information to "a database for everyone to see," which, according to Allen, would really put "a company at a significant risk of harm."

First, I'm not sure if Mr. Allen realizes that we live in an advanced technological age where almost anyone can instantly spread information around the world through the internet. If the government makes a mistake by releasing confidential information through a FOIA request, the damage isn't necessarily limited because it was only released to an individual or organization. That individual or organization could easily post the information to the web "for everyone to see."

Second, once the government releases information through a FOIA request, the information is in the public domain and there's no getting it back. If the government were to set up a public database where it posted contracts, it could remove improperly posted confidential information. Of course, if the government didn't catch the mistake in time and the public obtained the information then the damage would already be done. But, again, that risk is already present with FOIA.

To his credit, Tom Spoth, the author of the Times article, also interviewed Tom Lee of the Sunlight Foundation and Hugo Teufel of Pricewaterhouse Coopers, who both support the effort. Lee argued that online access to contract information "would encourage competition and result in better deals for the government," while Teufel claimed, "The public has a right to know how its tax dollars are being spent." I couldn't agree more on both points.

This effort is long overdue. As Lee points out, "current databases on government spending are inadequate" when it comes to contract information, and just because the contracting industry is scared of the government accidentally leaking proprietary information to the public isn't reason enough to scrub the exercise. One of the costs of doing business with the government, a process financed by taxpayer dollars, should be a lower threshold for releasing business information. With that comes the small risk that the government might accidentally release confidential or proprietary information.

Image by Flickr user luxomedia used under a Creative Commons license.