Third, where do we draw the line on which jobs are so "mission-critical" that they simply must be done by government employees? In some areas, the risks of losing control may well outweigh budgetary considerations -- as, say, in the interrogation of military prisoners. But the pendulum has swung so far in favor of contracting out that departments typically even hire outside companies to perform audits of other government contractors.
In Iraq, this issue is compounded by contractors' murky legal status. Under the Geneva Convention, they are noncombatants, but many of those working in Iraq carry arms and work as paramilitary security forces, or they are involved in training military security forces. Employees from at least two military contractors (CACI of Arlington, Va., and Titan of San Diego) are being investigated for their possible role in alleged torture at Abu Ghraib prison. The CACI contract has riled the procurement community because it was not even purchased directly by the Pentagon but was part of a larger contract negotiated by the Department of the Interior to provide computer network solutions.
Finally, how should this large and growing army of workers be managed? The rules governing how and what the government buys are designed to ensure fair competition. But more than half of government contracts are awarded without full competition, according to Taxpayers for Common Sense, a nonpartisan budget analyst. Giant contractors have become adept at gaming the system. Once firms win big contracts -- often using low-ball initial cost estimates -- the government becomes so dependent on their services that it's almost impossible to get rid of them.