Competitive Contracting, by the Numbers

May 16, 2007

The federal government buys millions of dollars in goods and services every year. It’s a huge and growing industry, and the important government services that contractors deliver have a large and immediate effect on everything from national security to protecting public health. So who decides—and how—which company gets a particular lucrative government contract? It’s supposed to be a fair, competitive, and open market for services to ensure that the quality of key government goods and services remains high and the costs of government—paid with taxpayer dollars—are minimized.

Unfortunately, reality falls far short of that ideal. As the new Center for American Progress report “A Return to Competitive Contracting” explains, contract abuse has become a widespread problem involving tens of billions of dollars every year and affecting a wide range of government programs and agencies. Failures of oversight into contracting procedures have made it possible for fraud, cronyism, and corruption to seep into the system.

Here’s a look at competitive contracting—by the numbers.

Federal contracting—a huge and growing industry

3: Percentage of GDP that federal contracts represented in 2005.

4: Percentage of GDP that the entire automobile industry represented in 2005, including the sale of imported cars and auto parts.

$203 billion: Value of federal contracting industry in fiscal year 2000, according to a 2006 report by the House Committee on Oversight and Government Reform.

$377 billion: Value of federal contracting industry in fiscal year 2005—an increase in five years of 86 percent.

17: Number of countries in the world that have economies larger than the federal procurement budget.

40: Percentage of all federal discretionary spending that contracts now represent.

Cronyism and corruption

$745.5 billion: Value of 118 federal contracts that “have been found by government officials to include significant waste, fraud, abuse, or mismanagement.”

$763.3 billion: Total value of Russia’s GDP.

5: Number of federal officials who have been convicted of crimes involving federal contracting in the last three years. Three others have been placed under indictment and more are under investigation.

$1.7 million: Value of a contract that Kyle “Dusty” Foggo, then executive director of the CIA, directed the agency give to his longtime friend San Diego businessman Brent Wilkes to supply bottled water to agency personnel in Iraq.

60: Percentage by which the CIA paid over market price for the water, according to court documents.

$12,000: Value of private jet flights of an all-expenses-paid trip to Scotland that Wilkes gave to Foggo.

$4,000: Value of a helicopter ride to a round of golf at Carnoustie on Foggo’s Scotland trip.

$44,000: Value of Foggo’s stay at Pitcastle Estate during his Scotland trip. The stay included trout fishing on hill lochs, salmon fishing on the River Tay, clay pigeon shooting, archery, and a seven-person staff.

Market for federal contracts becoming less fair, less open

115: Percentage increase between 2000 and 2005 of the value of contracts not subject to full and open competition—from $67 billion to $145 billion.

38: Percentage of federal contract dollars awarded in 2005 without full and open competition.

600: Percentage by which federal spending on Halliburton contracts increased between 2000 and 2005.

$49 million: Amount Boeing received in “extra profits” for a contract to oversee other Department of Homeland Security contracts.

$1.5 million: Amount Transportation Security Administration executives awarded themselves in year-end bonuses—an amount one-third higher than the bonuses given to executives at any other federal agency.

$462,000: Amount TSA executives spent on an awards ceremony.

$2,000: Price of seven sheet cakes at the ceremony.

It’s the constitutional responsibility of Congress to make sure that the taxpayer dollars that fund government goods and services are being spent efficiently and effectively. The legislature has clearly fallen down on the job over the last several years. CAP’s report “A Return to Competitive Contracting” offers recommendations for how Congress can confront fraud, waste, and abuse in the contracting system. Americans deserve to know that the government is using their money appropriately.