Senator Clinton Calls for Action on Wasteful, Unaccountable Government Contracts

Press Release

Date: April 9, 2008
Location: Washington, DC
Issues: Environment

Senator Clinton Calls for Action on Wasteful, Unaccountable Government Contracts

Senator Clinton to Introduce Legislation to Stop Waste, Fraud, and Abuse Within Federal Government Contracting

Senator Hillary Rodham Clinton today blasted the Bush Administration for its overreliance on private contractors amid reports of rampant waste, abuse, fraud and overspending of taxpayer dollars on private government contracts. Senator Clinton announced that she will introduce legislation to stop waste, fraud and abuse in government contracting.

"Government contractors must be held accountable to the American people for the work they are contractually obligated to perform. From key homeland security agencies like the Federal Protective Service to critical intelligence programs, the Bush Administration is intent on privatizing as much of the federal government as possible. While a number of contractors perform honest work for the federal government, the contracting process is wrought with waste, fraud, and abuse, and the system is clearly broken," Senator Clinton said. "We need to bring new transparency and accountability to government contracting and must weed out wasteful contracts."

A recent Government Accountability Office (GAO) report revealed that government-wide spending on contractor services has more than doubled in the last 10 years. In FY 2006, the federal government spent over $400 billion on private contractors, with the Department of Defense (DOD) being the largest purchaser. In addition, the number of contracts that are not competitively bid has also soared. According to a recent Congressional report, the number of no-bid contracts has more than doubled under the Bush Administration. Spending on both no-bid and limited competition contracts, together, has more than tripled, from $67.5 billion in 2000 to $206.9 billion in 2006.

In response, Senator Clinton will introduce legislation that will reform the federal contracting process by bringing new transparency to the process; holding private contractors accountable; holding managers of contracts—including political appointees—accountable; and encouraging competition.

Senator Clinton's legislation will address reports that the Bush Administration's overreliance on private contractors has resulted in an overwhelming number of disturbing abuses:

* A recent Government Accountability Office (GAO) report revealed that 95 major programs at the DOD have exceeded their original budgets by a total of $295 billion and are on average delivered almost two years late.
* A recent report revealed that the DOD awarded a $300 million contract to a company run by a twenty-two year old who provided decomposed ammunitions to our allies in Afghanistan in order to fulfill his contractual obligation.
* The federal government is becoming increasingly reliant on private contractors to perform inherently governmental work. More and more private contractors are being asked to carry out the mission of the federal government without being held to the same standards as federal employees.
* Under the Bush Administration, the practice of giving private contractors award fees or bonuses without regard to performance has continued to grow. Recently, the Inspector General of the EPA found that the agency has paid nearly $16 million in award fees over the past 10 years with no assurance that the contractors demonstrated a higher level of performance. In 2005, the GAO found that the DOD paid out $8 billion in bonuses on large contracts without regard to performance and that despite paying billions in award fees, DOD had little evidence to support the assertion that these fees actually improved performance.
* Recent reports indicate that the State Department may be renewing its contract with Blackwater Worldwide even though the company is under investigation for violating the rules governing the use of deadly force in Iraq.

Senator Clinton has worked aggressively to stop abuses of government contracts. She secured into law two measures to curtail wasteful and unnecessary practices that outsourced critical national security jobs to private firms and that rewarded underperforming private contractors. One measure stopped DHS's plan to downsize the Federal Protective Service, which is charged with protecting 9,000 non-military Federal buildings. The other provision barred DHS from giving award fees or bonuses to private contractors that do not meet the stipulations related to cost, schedule, and performance outlined in the contract. Additionally, Senator Clinton offered an amendment to the FY 2009 Budget Resolution calling for a one-year moratorium on abusive and unchecked no-bid contracts.