WASHINGTON, D.C. --- The American Economic Liberties Project today released “Caveat Emptor: Reversing the Anti-Competitive and Over-Pricing Policies That Plague Government Contracting,” a new report detailing how the government contracting process has been transformed to the almost exclusive benefit of corporate interests. The report comes as Congress debates the National Defense Authorization Act, which sets out defense contracting policy.
“The federal government has adopted purchasing practices that prevent agencies from obtaining meaningful information to negotiate better contract prices, essentially allowing companies to charge whatever they can get away with,” said Richard C. Loeb, an Adjunct Professor of Government Contract Law at the University of Baltimore School of Law and a former senior procurement official at the Office of Management and Budget. “Congress should repeal the 1990s laws that effectively legalized overcharging, decimated open competition and transparency, and encouraged federal contractors’ to control much of our government.”
“Caveat Emptor” explains how changes to obscure and arcane contracting laws made largely during the Clinton administration virtually gutted competition and common-sense pricing protections. As a result, the government now pays far too much for private sector goods and services, and often does not get what it pays for. Indeed, today, costs associated with government contracting represent nearly half of all federal discretionary spending.
The report recommends Congress restore federal contracting law to require that contract spending be competitively bid, or, where competition is not adequate, to require that contractors provide meaningful data to allow robust and informed price negotiations. The report also proposes that Congress increase transparency by requiring advance notice and competition for all contract spending, and by establishing an inventory of contractor personnel performing work under all U.S. government service contracts, similar to the information already publicly posted for most federal employees.
Economic Liberties works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. AELP believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.
Click here for the full report (14 PDF pages), on the EL website.