March 12, 2009

Responsible contracting and insourcing: The new efficiency

Open season on fleecing the government is coming to a close.  

President Obama this month announced dramatic reforms to all federal contracting, to strengthen oversight, stop blatant giveaways like no-bid and cost-plus contracts, and "stop outsourcing services that should be performed by the government." The White House website describes the new policies as "Priorities -- Not lining the pockets of contractors."

The 2009 omnibus appropriations bill  passed by the US Senate this week halts the Bush practice of competitive sourcing -- known as managed competition in San Diego -- in which public agencies must compete with private companies for their jobs.  The bill also requires agencies to consider bringing previously outsourced work back in-house.

As the President said on March 4:

"Over the last eight years, government spending on contracts has doubled to over half a trillion dollars. Far too often, the spending is plagued by massive cost overruns, outright fraud, and the absence of oversight and accountability.  …It's time for this waste and inefficiency to end."

The abuses by companies with government contracts have been flagrant.

In Iraq, a Halliburton subsidiary electrocuted troops with sloppy wiring.  In San Diego, contractors overcharged the city and the county for clearing debris from homes destroyed by wildfires.  Everywhere in between, contractors hired to serve the public have instead degraded services and inflated costs.

Contracting out public services also opens a wide door to corruption.  The risks in applying the profit motive to the prison system are highlighted, CPI Executive Director Donald Cohen writes in a recent blog, by the private detention centers that paid judges kickbacks to imprison teenagers on flimsy charges.

In addition, private contractors often pay poverty wages and deny workers healthcare benefits, rather than increase efficiency to save money. In Outsourcing Poverty, a study released last month, the Washington-based Economic Policy Institute found that one in five federal contract workers are paid below the poverty level.

Mistreatment of the contract workforce is a double rip-off for taxpayers -- quality suffers from high turnover and low morale, and workers must rely on public aid -- as the Center for American Progress has documented in a report, Making Contracting Work for the United States.

While Obama is beginning to shine a light on the shady world of federal contracting, much effort is still needed to ensure that the stimulus money is spent responsibly and to stop the fleecing of state and local governments.  CPI is part of a national Coalition for an Accountable Recovery, which is fighting for greater disclosure and accountability by private contractors.

Gloria Steinem: The fight for justice continues

Gloria Steinem came to San Diego to celebrate International Women's Day, at the invitation of her old friend and women's movement colleague, CPI Board Member Gracia Molina de Pick. 

Steinem, one of the most influential voices for women's rights and equality in US history, spoke to a crowd of more than 300 at the San Diego LGBT Community Center.

Photos and a video are on the CPI website.