A dramatic increase in the contracting of government services has resulted in a litany of problems, ranging from cost overruns and missed deadlines to a lack of oversight, according to the Government Accountability Office (GAO). From 2001 to 2005, the number of federal contractor jobs surged by 72 percent, increasing from 4.4 million to 7.6 million. Spending on contractors nearly doubled from FY 2001 to FY 2006, jumping from $234.8 billion to $415 billion The GAO has issued a series of reports identifying problems associated with the rise in outsourcing. Among the issues: “separating wants from needs; executing acquisition programs within available funding and established timeframes; using sound contracting arrangements with appropriate incentives and effective oversight; assuring that contractors are used only in appropriate circumstances and play proper roles; and sustaining a capable and accountable acquisition workforce ” GAO auditors found that interagency contracting was a “high-risk area” for outsourcing, as were the Department of Energy, Department of Defense, and the National Aeronautics and Space Administration. The agency also cited concerns about the Centers for Disease Control and Prevention, which now contracts out one-third of its workforce. Lack of competition is another problem. The Department of the Interior’s inspector general found that more than a quarter of the agency’s $380 billion in contracts were awarded without competition.

The Environmental Protection Agency’s (EPA) own science advisory board has joined a host of critics questioning the agency’s decision not to set a drinking water standard for perchlorate, a rocket fuel ingredient that can hinder brain development. Perchlorate has shown up in more than 150 drinking water systems in 35 states, and the EPA has wrestled with what to do about it for years. Critics charge that the agency has been reluctant to act because the pollutant is released by the politically influential aerospace industry and Department of Defense.

In 2002, EPA scientists found that perchlorate posed a danger to human health at concentrations greater than one part per billion (ppb), but the agency told staff members not to talk about the issue, pending further study by the National Academy of Sciences (NAS). An NAS panel reported in 2005 that it could not find a conclusive link between perchlorate and health hazards, but the panel acknowledged that there had been no research examining the relationship between perchlorate exposure and highly vulnerable populations such as pregnant women and their babies.

In 2006, the Centers for Disease Control (CDC) published a study finding that perchlorate exposure endangers fetal brain development in one-third of pregnant American women at levels of 7 ppb. But the EPA announced in October 2008 that it would set no safety standard for perchlorate, arguing that a new regulation would not present a “meaningful opportunity” for reducing health risks.

The highly-secretive National Reconnaissance Office (NRO) — responsible for U.S. surveillance satellites — saw its high-tech image tarnished in a series of management and technology failures. Most of the failures related to a $25 billion satellite program known as Future Imagery Architecture (FIA), which the agency envisioned as the next generation of U.S. super-surveillance systems. While the NRO’s funding and operations are closely held national security secrets, industry and government officials have let slip that FIA ran up a nearly $10 billion tab on what was supposed to be a $5 billion to $7 billion satellite development project with The Boeing Co.; ultimately, the Department of Defense, NRO’s parent agency, cut its losses and dropped the program altogether in 2005. Other elements of the FIA program ran years behind schedule due to mismanagement, including a classified program intended to develop advanced lenses for space-based surveillance imagery systems. Former Director of National Intelligence John Negroponte, whose office has jurisdiction over all intelligence program budgets, killed that program soon after taking office in April 2005. “It was killed, dead, buried, stake in the heart,” said Patrick F. Kennedy, a Negroponte deputy. “We have an alternate [system] that will deliver the capability that we’ve needed cheaper, better, faster.” But in October, congressional budget makers, with a still-skeptical gaze toward NRO, scrapped funding — reportedly more than about $1 billion — for two NRO launches scheduled for around 2012 as part of the proposed alternate system: the Broad Area Space-Based Imagery Collection satellite system.

The Federal Bureau of Investigation’s (FBI) new counterterrorism assignments have bled resources from its other missions. Traditionally the FBI has fought domestic bad guys — bank robbers, white-collar criminals, mobsters, and spies — but now its top three priorities are counterterrorism, counterintelligence, and cyber-security. As resources have accrued to these areas, prosecutions have dropped off for white-collar and financial crimes, such as mortgage fraud, and for local criminal activity. Analyses of data from the Department of Justice by Transactional Records Access Clearinghouse, the Seattle Post-Intelligencer, and The New York Times have demonstrated the decline in investigations and prosecutions for financial or white-collar crimes, while the number of terrorism-related cases has ballooned. “It's continuously an effort to request new resources while prioritizing the resources that we have,” FBI Director Robert Mueller told the House Committee on the Judiciary in September 2008. Mueller fought the Office of Management and Budget to gain greater funding for his criminal investigators, according to The New York Times; he lost that battle. The bureau is pursuing an increasing number of mortgage fraud cases, but the 2009 budget continues to prioritize funds for counterterrorism at the expense of other FBI functions.