President Obama, along with his team, have made promises to the American people (and hilariously to China) that they are going to get spending and the deficit under control.  Ignoring the financial cancers the Obama administration inherited it’s still too soon to judge them on their promises, so this post will not be a complaint about them.

This problem came from Bush 2.0 who I believe was manipulated by a staff eager to capitalize on the power held in the office controlled by a mostly out of touch goofball.  This is coming from someone who voted for him in 2004.  Okay disclaimers out of the way, let’s get started.

As a traditional conservative George W Bush implemented what could have been considered the best idea to happen to the defense department budget in decades.  Republicans believe government does not achieve efficiencies with money and therefore anything that can be privatized, should be.  When it came time to invade Afghanistan and Iraq, the American government made long term commitments to both countries to help them rebuild and reorganize.  By privatizing many of the projects in these countries, the government could take bids from contractors willing to do the work. Like any other bids, you go with the best deal you get. This could save the American people BILLIONS.

Sadly, this philosophy was poorly designed and even poorly implemented.  Over the last eight years we’ve seen many stories of government contracts that required no bidding.  Though not always the case, it’s easy to imagine these deals were quid pro quo between a contractor and someone in the defense department.  No-bid deals can lead to no savings or even an increase in the cost, burning away taxpayer money.  And the fact is, had that merely been the issue we’d probably be sitting pretty.

The problem is our government hasn’t been tracking all of this spending.  This is called oversight.  You’d think a technology powerhouse like our military would have a centralized database of all these contractors, what they’re doing, when they’re supposed to be done, how much we’re paying them, who approved the project etc…  Sadly such a database doesn’t exist.

It’s only natural with 240,000 private sector employees supporting our military and no tracking system in place that we’d lose a few bucks. With so many contractors doing so much over there, we’ve literally lost track of spending.  The AP provides an example:

…construction of a $30 million dining facility at a U.S. base in Iraq scheduled to be completed Dec. 25. The decision to build it was based on bad planning and botched paperwork. Yet the project is too far along to stop, making the mess hall a future monument to the waste and inefficiency plaguing the war effort.

Congress designated an independent commission to do this study.  They also learned that with many troops moving out of Iraq, no one will be there to supervise the contractors.  In Afghanistan, a commander stated he had no idea how many contracted employees are coming in and out of his base every day.  No way to track it.

The work they’re doing is crap too.  A building in Afghanistan constructed by contractors has cracks, broken pipes and sinking sidewalks among other defects unacceptable in the US.  The AP article goes on and on about billions of dollars being wasted.

I don’t see a problem here with contracted work.  Had this been implemented properly we could have seen a fantastic degree of success.  However now contracted work will be branded as a bad thing because politicians need only cite the wars as examples of why.  I guess it’s back to regular government waste.  The wheels keep spinning.

Photo: army.mil

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice.

categories: business, government