Out of House, out of mind.

• Author: Watzman, Nancy
• Position: Government contractors lack effective oversight

For Science Applications International Corporation, the deal was a sweet one. The Department of Defense had hired the company to evaluate weapons performance. Simultaneously, Science Applications (SAIC) had contracts or subcontracts to help make many of these same weapons, including the Patriot, Stinger, and Harpoon missiles. It was like letting a business school aspirant write her GMATs--and then grade them.

The perversity of this arrangement was not lost on Republican Senator William Roth of Delaware, who said at a June 1989 congressional hearing that the company was "being asked to support testing assessments for [the Strategic Defense Initiative]. At the same time SAIC is the 26th largest SDI contractor. Tell me that is not a conflict of interest." The senator had a point, and the Defense Department knew it. After the hearing, Defense canceled the contract, and the SAIC episode suddenly looked like an example of government actually working.

That impression lasted two years. On December 10, 1991, avid readers of the Federal Register saw an oblique two-page notice from the Department of Energy announcing it was hiring SAIC to evaluate programs even though there was "a potential conflict in that SAIC... could [be] reviewing its own work."

How did SAIC end up the sole bidder and winner of another lucrative deal, not to mention another conflict of interest in another agency? A glitch in bureaucratic communications? Sadly, it's more like business as usual in the free-wheeling, double-dealing realm of government contracting, where companies often straddle the public and private sectors to maximize profits from both, and fritter away taxpayers' money on expenses that would give even William Sessions pause.

In the past decade, more and more companies have elbowed in on the action as the amount of work farmed out to companies ballooned. Since 1981, for instance, Environmental Protection Agency dollars spent on contractors increased 237 percent. The Department of Energy (DOE), an early Reagan reduction target, lost more than 4,000 employees during the eighties. As of 1990, DOE's contract workers outnumbered staff seven to one.

None of this would be alarming if contractors had some real accountability to taxpayers and refrained from stunts like charging embossed chocolates and rent-a-clowns to the government. Instead, no one effectively oversees contract money, how wisely it is spent, and the value taxpayers get for their dollar. The results have...