Feds Can't Win Without Trying When They Spend Money

Last Updated Jul 23, 2009 6:00 AM EDT

The Federal Government is trying to spend about $787 billion in "stimulus" funds. At the same time they are trying to be kind, good stewards of the tax payers money. These attempts are getting hit from all sides as the economy fails to get stimulated and unemployment rises. One of the major issues with the spending is that the contracting rules are so complicated that it takes time to draw up the requirements package, release an request for proposal, evaluate those received and award the final contract. Much of these rules are in place to prevent possible corruption or waste. Some of the rules are to favor certain suppliers or disadvantaged businesses. They all add up to a process that may take months to get a contract out of the door.

Here is an article attacking the Department of Defense for "wasting" money because to speed up the process they are awarding sole source contracts to disadvantaged and small businesses. Would there be a chance that a lower bid might be received if more were received? Yes, but that may add a great deal of time to the process and delay the effect of the contract on the economy. To make matters worse the Government has been accused of not giving enough contracts to small businesses to meet Congress's goals. In some cases these required contracts to small or favored groups may drive up the cost of the work.

The Government is also under fire as it turns out that unofficially Departments have been told to make sure that when they are arranging conferences or meetings to try and avoid places like Las Vegas or Orlando as it seems like the trip is just to have fun and not work. Tourist areas have taken a heavy hit as the economy has worsened. Now they cannot get government travelers. The agencies are concerned that they will received bad media coverage if it looks like they are going to these places.

The problem is that the Obama Administration and the Democratic Congress chose to use government spending as the stimulus rather then just give money to citizens. This is one way of doing it and was done a lot in the Thirties during the Great Depression. A great deal of the U.S. spending at that time went for things like ships, roads and construction. Contracting was not that complicated back then and money moved rather quickly. Today it is a great deal more complicated and while this employs government contracting officers most of them had jobs a year ago. The media was also not reflexively hostile to government back then either.

The government could move to rapidly push the money out of the door using available methods -- like the sole source reasoning. They could try to waive requirements to meet small business, minority owned or disadvantaged businesses to speed up things or dump the whole "Buy American" parts but that would just raise hackles with Congress, the media and lobbying groups. As such they are moving carefully and cautiously following the rules, dotting their I's and crossing the T's. This is not conducive to rapid contracting. There is really no hope for future changes that might speed things up.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.