A June 2007 report of the House Committee on Oversight (Waxman Committee) found that discretionary spending had grown from $614.8 billion in 2000 to $1 trillion in 2006. Of this, spending on procurement rose from $203.1 billion in 2000 to $412.1 billion in 2006, representing an average annual increase of 12.6% as compared to 2.4% a year for inflation.
Among departments, Pentagon spending on procurement increased from $133.5 billion in 2000 to $297.7 billion in 2006 representing 72% of the total federal procurement budget. At the Department of Homeland Security, procurement spending went up from $3.5 billion in 2003 when the DHS was created to $15.1 billion in 2006 with $5.1 billion of that occurring between 2005 and 2006 alone.
Among contractors the top 6 were Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, and Halliburton. Together, they received $99.9 billion in 2006 or 24% of all federal procurement spending in that year. The largest federal contractor was Lockheed Martin with 14,016 contracts worth $31.5 billion, or more than the gross domestic product of 109 countries. Interestingly, Halliburton which Vice President Cheney once headed has been the fastest growing federal contractor. It went from 28th place in 2000 with $763 million in contracts to 6th place with $6 billion in 2006, a 700% increase. It’s good to be the king, as Mel Brooks once said.
As for the contracts, $67.5 billion were let in 2000 without full and open competition. By 2006, this had increased to $206.9 billion, an increase of 206%. Of this last number, no-bid contracts comprised $103 billion, up form $46.6 billion in 2000. Limited competition contracts (where only a small pre-selected group is allowed to bid) amounted to $62.6 billion in 2006. In $10 billion of these, there was in fact only one bidder. Among contracts listed as available to full and open competition in 2006, some $47.7 billion also had a single bid up from $11.7 billion in 2000 (a 308% rise).
The report also found significant waste, fraud, and abuse in 187 ongoing contracts worth $1.1 trillion. The principal reason for this has been a failure in oversight. While procurement contracts have exploded in size and number under the Bush Administration, competition has shriveled, more abuse prone cost-plus contracts have been awarded, and the number of personnel to oversee them has remained static. It is all a recipe to loot the government by the powerful. It is welfare for the wealthy and the well connected.