If you’re Jared Kushner, what could possibly be harder than mending U.S.-Mexico relations? Try being Washington’s front man for streamlining the out of control, stagnant federal government bureaucracy.
As the recently-appointed head of the new Office of American Innovation, Kushner has been tasked with incorporating private sector solutions into some of the government’s most dysfunctional agencies, operations, and services. While this might seem like an impossible task, there is one way the new office can clinch a big first win: stopping the government’s wasteful, uncompetitive practice of awarding sole-source (“no-bid”) contracts.
In typical Washington fashion, hasty bureaucrats oftentimes dole out large government contracts to their favored multi-million dollar corporations without even considering others for the job. Key decision-making factors like cost, efficiency, and reliability are tossed to the curb in the name of working in “the public interest.”
These bureaucrats are spending our tax dollars like children rolling down the supermarket aisles.
It is irresponsible and unsustainable. If the Trump administration is serious about “draining the swamp,” then these no-bid contracts need to be blasted into the history books.
Kushner will not be fighting alone. There is already a movement building in Congress to stop this blatant waste and cronyism.
Last month, House Science, Space, and Technology Committee chair Lamar Smith (R-TX) sent a letter to the new Health and Human Services Secretary Tom Price asking for details about millions of dollars that the National Institutes of Health (NIH) has paid to the Ramazzini Institute over the past few decades. Ramazzini, a little-known scientific institution in Italy, has churned out a slew of controversial pronouncements on occupational and environmental health. Since 2009 alone, the NIH has reportedly sent $92 million to the Ramazzini Institute and its fellows, mostly in the form of no-bid contracts. NIH’s Linda Birnbaum, who also happens to be a Ramazzini fellow, oversaw many of these disbursements.
Ramazzini has enjoyed a steady stream of competition-free NIH funding and has not produced much of anything with its allocated taxpayer funds. But Congress has more than one bone to pick with the NIH’s spending: the body also wants more information about NIH’s funding links to the France-based International Agency for Research on Cancer (IARC).
Last fall, the House Oversight Committee began investigating NIH’s funding of IARC, an agency that has already been under scrutiny for peddling “fake news” in the science realm. A number of IARC personnel have professional ties with both Ramazzini and the NIH, raising the question of what motivated the NIH to award sole-source contracts to these overseas organizations.
Unfortunately, the NIH isn’t alone: other big government agencies like the Department of Homeland Security and Department of Defense award their own questionable no-bid contracts. For example, in 2003, the brand-new DHS signed a $2 million no-bid contract with Booz Allen Hamilton to start a new intelligence operation. By the end of 2004, monthly payments to Booz Allen had shot up to $30 million—15 times the original value of the deal. Per the department lawyers who later investigated the agreement, the contract had gone “grossly beyond the scope” of the original terms and in violation of government procurement rules.
But things got worse: in 2008, an audit found that FEMA had exposed taxpayers to fraud and wasted at least $45.9 million on four no-bid contracts for post-Katrina recovery work. FEMA later raised the total amounts for the four no-bid contracts to $2 billion and later $3 billion. The waste was incredibly flagrant: contracts included a $20 million payment for an evacuee camp that was never inspected and turned out to be unusable.
FEMA was rightly taken to task for how badly it bungled its contracts, but the scandal changed absolutely nothing about how government contracts are doled out today. This past December, Microsoft landed a nearly $1 billion no-bid contract for tech support services to DoD. Could another contractor have offered a more competitive bid? We will never know.
Sole-source bidding has already wasted billions of taxpayer dollars, but government officials apparently care more about whatever time they save by avoiding a standard request for proposal process than they do about creating a fair, efficient playing field. Permitting market competition might be an inconvenience to them, but it is the only way to cut down on cronyism and force contractors to maximize performance.
The problem at hand is a thoroughly bipartisan one as well. In 2008, candidate Obama promised to “end the abuse of no-bid contracts once and for all.” Instead, his administration raised them to record highs after just four years.
If President Trump truly wants to “apply his ‘ahead of schedule, under budget’ mentality to the government,” then he will eliminate this pernicious culture that has seeped into so many corners of government. After all, the administration’s new Office of American Innovation was created with the intent of bringing private sector solutions to government. Given the trail of waste and fraud that no-bid contracts have left, this kind of initiative should be a no-brainer.
Tommy Behnke (@Tommy_Behnke) is a Mises Institute alumnus and former communications staffer for Sen. Rand Paul. His commentary on fiscal and monetary policy has been highlighted in The Hill, Zero Hedge, Business Insider, the Mises Institute, Washington Examiner, Conservative Review, and the Daily Caller.