November 18, 2005

November 18, 2005 | Commentary on Federal Budget

Contracting Chaos on Gulf Coast

As the federal government prepares to dump billions into the Gulf Coast hurricane recovery and reconstruction effort, it's only right that we watch carefully to ensure the money is well spent.

State and federal agencies such as the Federal Emergency Management Agency will spend federal dollars by the bucketful, and the potential for fraud, waste and abuse is huge. But if Americans will keep in mind the following maxims, they'll understand what the problem is and what can be done about it:

There are no better options. Contractors are here to stay. One of the great successes of American society is the expansion of the private sector. Today's businesses enjoy an unprecedented ability to expand, innovate and adapt to market needs, including the capacity to provide what were thought to be exclusively government functions. In many cases, they can do things faster, better and more efficiently than government. They are part of the solution, not part of the problem.

Politics is a big part of the problem. Americans want everything. They want aid dispensed quickly with little red tape but insist on careful accounting of every tax dollar. They want local companies to rely on local workers, and they insist that minority-owned firms get their share of the business, even if those firms lack the expertise to perform the work.

Politicians are only too happy to oblige these sometimes-contrasting demands and to castigate government on all counts when things don't go as they should. They want everything done yesterday, but they decry the unfairness and impropriety of no-bid, do-it-now contracts.

Americans need to decide what they value - good work or quick work. Perhaps politicians could remind them of that old saw: "Good. Cheap. Fast. Choose any two."

In this case, the priority must be on rebuilding public infrastructure in a competent, efficient manner and creating conditions for economic growth that would be more effective in the long term than pork barrel government spending.

People are the answer. Those who manage the reconstruction efforts on the Gulf Coast could take a lesson from the contracting troubles in Iraq. Both projects called for rebuilding vast amounts of public infrastructure, revitalizing the economy and doing it all quickly.

In Iraq, government was slow to grasp the scope of the task or to plan realistically. As a result, it lacked the work force to assess, manage and oversee the billions of dollars handed out over several months. To the extent possible, officials need to develop a vision for the finished project, establish management structures and provide the people, skills and resources to do the job properly.

Transparency and oversight work. The federal government and many private sector firms hand out billions in contracts all the time without having bagfuls of money stolen or wasted. Audits fix responsibility and keep the system honest. That's what has made things better in Iraq.

Since the special inspector general for Iraq reconstruction began to oversee government contracting two years ago, there has been much greater accountability over government spending. The strength of the inspector general's office stems from the nature of its mandate; it covers all involved federal agencies and reports both to the heads of those agencies and to Congress.

The Gulf Coast needs an inspector general with a similar mandate. In fact, Congress should simply expand the mission of the Iraq special inspector general's office to cover the operations in the United States. It has the work force and tools to do the job, it could be up and running in days and it enjoys the critical independence of being unattached to federal agencies.

Americans can't do much about the weather, as Katrina tragically demonstrated. But they can see that contracts are properly administered, that hard choices are made properly and that politicians are accountable. The clock is ticking. Every day that we delay in establishing effective oversight, the likelihood of trouble increases.

James Carafano is a senior research fellow for defense and homeland security at The Heritage Foundation.

About the Author

James Jay Carafano, Ph.D. Vice President for the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, and the E. W. Richardson Fellow

First appeared in The Baltimore Sun