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Report: ‘Shadow Goverment’ Of Private Contractors Explodes Under Bush

By Amanda Terkel on June 27, 2007 at 12:45 pm

"Report: ‘Shadow Goverment’ Of Private Contractors Explodes Under Bush"

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A new report by the Committee on Oversight and Government Reform concludes that, under the Bush administration, the “shadow government of private companies working under federal contract has exploded in size. Between 2000 and 2005, procurement spending increased by over $175 billion dollars, making federal contracts the fastest growing component of federal discretionary spending.”

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But while private contractors — such as Halliburton and AshBritt — have been reaping huge profits, “billions of dollars of taxpayer money have been squandered.” Some highlights from the report:

– Halliburton has been the “fastest growing contractor.” Under the Bush administration, federal spending to Halliburton “increased over 600% between 2000 and 2005.” The Government Accountability Office recently found that the government has wasted at least $2.7 billion to Halliburton on “overpriced contracts or undocumented costs.” At the end of 2005, Cheney’s stock options were valued at more than $8 million, a 3,281 percent gain from 2004.

– Growth in federal contracting exceeds inflation rate. In 2000, the value of federal contracts totaled $203 billion. By 2005, the value was $377.5 billion, an 86 percent increase. The new report notes that this “growth in contracting was over five times faster than the overall inflation rate and almost twice as fast as the growth in other discretionary federal spending over this period.” A record level of “nearly 40 cents of every discretionary federal dollar now goes to private contractors.”

– Noncompetitive contracts skyrocket. Sole-source and noncompetitive contracts grew by “an even faster rate than overall procurement spending, rising by 115% from $67.5 billion in 2000 to $145 billion in 2005.” Many of these no-bid contracts during the Iraq war and Katrina reconstruction went to Bush administration cronies who wasted money and performed shoddy work.

In the report’s review of 500 contracts, 118 contracts worth $745.5 billion “experienced significant overcharges, wasteful spending, or mismanagement over the last five years.” A recent report by American Progress Senior Fellow Scott Lilly has more details about the Bush administration’s procurement process problem and what Congress can do to clean up the mess.

UPDATE: The Gavel has video of House oversight chairman Henry Waxman (D-CA) discussing the new report.

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