Procurement spending up $175 billion since 2000

Procurement spending grew 86 percent from 2000 to 2005, but management problems have resulted in significant levels of waste and abuse, according to a report released by Democratic lawmakers last week.

The report, titled "Dollars, Not Sense," was prepared by Democrats on the House Government Reform Committee, and was based on more than 500 reports by the Government Accountability Office, agency inspectors general and the Defense Contract Audit Agency, as well as interviews and data from a government procurement database.

Investigators found that procurement spending has increased significantly under the Bush administration, growing by 86 percent from $203 billion in fiscal 2000 to $377.5 billion in fiscal 2005. The present spending level represents a record 40 cents on every dollar of federal discretionary spending, according to the report.

Five companies won more than 20 percent of the contract dollars awarded in fiscal 2005, with Lockheed Martin Corp. topping the list, followed by Boeing Co., Northrop Grumman Corp., Raytheon Co. and General Dynamics Corp. for a total of $80 billion. Halliburton experienced the fastest growth in federal contracting over the last five years, with a 600 percent increase since 2000.

Widespread mismanagement has accompanied the growth of procurement spending, investigators concluded, citing poor planning, noncompetitive awards, abuse of contract flexibilities, inadequate oversight and corruption as some of the problems.

The partisan report highlighted wasteful and abusive spending resulting from three contracting "binges" -- Iraq reconstruction, Hurricane Katrina reconstruction and the homeland security buildup -- and cited Defense Department weapons acquisitions programs as a costly area of concern.

The Democrats' report also brings a new element to the ongoing debate about recent procurement problems.

Accompanying the report is a searchable Web site with links to 118 "problem contracts," collectively worth $745.5 billion, in which significant levels of waste, fraud or abuse have been identified by government overseers. For each contract, the site lists information on the awarding agency, the contractor, performance problems identified and links to reports on the contract.

A staffer for the Government Reform Committee said the site will be continually updated, with new contracts added and existing information maintained.

Office of Management and Budget press secretary Scott Milburn noted that the report was based on previously released information and highlighted often-discussed problems. "Effective stewardship requires constant vigilance, but strong internal controls together with congressional oversight provide a framework for making sure the public's money is spent responsibly," Milburn said.

Stan Soloway, president of the Professional Services Council, an industry group based in Arlington, Va., admitted contracting problems exist. "I'm not saying everything's perfect, but I think the report dramatically and wildly overstates the extent of the problems," he said. "I'm very disturbed by this rush to claim that everything is abusive and fraudulent, even when well-meaning people have just made a mistake."

Soloway also questioned whether the report contributed to finding bipartisan solutions to the challenges facing the acquisition community: "Unfortunately, I don't think this report adds to the public discourse."