THE GEORGE WASHINGTON UNIVERSITY LAW SCHOOL
PUBLIC LAW AND LEGAL THEORY WORKING PAPER NO. 109

CONTRACTOR ATROCITIES AT
ABU GHRAIB: COMPROMISED
ACCOUNTABILITY IN A STREAMLINED,
OUTSOURCED GOVERNMENT

STEVEN L. SCHOONER
Accepted Paper
16 STAN. L. & POL’Y REV. 549 (2005)

This paper can be downloaded free of charge from the
Social Science Research Network at:
http://ssrn.com/abstract=605367

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CONTRACTOR ATROCITIES AT
ABU GHRAIB: COMPROMISED
ACCOUNTABILITY IN A STREAMLINED,
OUTSOURCED GOVERNMENT
Steven L. Schooner†
INTRODUCTION ..............................................................................................1
I. THE RUSH TO OUTSOURCE .........................................................................3
II. TROUBLING ANECDOTES FROM ABU GHRAIB...........................................7
III. INADEQUATE CONTRACT ADMINISTRATION: A FALSE ECONOMY ..........9
IV. PERSONAL SERVICES CONTRACTS: GOVERNMENT DEPENDENCE
ON EMPLOYEE AUGMENTATION .......................................................13
V. FLEXIBLE FEE-BASED ACQUISITION INSTRUMENTS:
UNANTICIPATED EXTERNALITIES .....................................................16
CONCLUSION: RESPONSIBLE DELEGATION OR ABDICATION OF
RESPONSIBILITY? ..............................................................................22

INTRODUCTION
Staggering numbers of contractor personnel have supported, and continue
to support, American combat and peace-keeping troops and the government’s
Herculean reconstruction efforts in Iraq.1 In addition to more than 1000
†
Steven L. Schooner is an Associate Professor and Co-Director of the Government
Procurement Law Program, George Washington University Law School. Professor Schooner
previously served as the Associate Administrator for Procurement Law and Legislation at
the Office of Management and Budget (OMB) and as a trial attorney in the Department of
Justice. As an Army Reserve officer, he is an adjunct professor in the Contract and Fiscal
Law Department of the Judge Advocate General’s School of the Army in Charlottesville,
Virginia. This Article, which derives from the author’s September 10, 2004 testimony before
the Senate Democratic Policy Committee, was improved by comments from Michael J.
Benjamin, Elizabeth D. Berrigan, Daniel Gordon, Dan Guttman, Timothy Pendolino, Heidi
M. Schooner, Joshua I. Schwartz, Steven Tomanelli, Jerry Walz, Christopher R. Yukins, and
the members of the Procurement Round Table. The author thanks Erin Siuda for her prompt
and diligent research assistance and acknowledges the generous support of the Seymour
Herman Faculty Research Fund in Government Procurement Law.
1. From an investment perspective, comparisons to the Marshall Plan abound, and

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reported military fatalities, many contractor employees have died or been
injured in performing these services.2 Yet recent experiences in Iraq,
particularly allegations that contractor personnel were involved in inappropriate
and potentially illegal activities at the Abu Ghraib prison, expose numerous
areas of concern with regard to the current state of federal public procurement.
Sadly, because these incidents coincide with a series of procurement scandals,
the likes of which the government has not experienced since the late 1980s,3
estimates, in the tens of billions of dollars, widely vary. For example, a White House press
release stated: “Initial estimates are that Iraq will need between $50-75 billion to achieve
these conditions for success.” Press Release, Office of the Press Secretary, The White
House, Fact Sheet: Request for Additional FY 2004 Funding for the War on Terror (Sept. 8,
2003), http://www.whitehouse.gov/news/releases/2003/09/iraq/20030908-1.html (last visited
Mar. 26, 2005). For more on the scope of the effort, see Robert S. Nichols, Iraq
Reconstruction: Needs, Opportunities, and the Contracting Environment, 80 Fed. Cont. Rep.
(BNA) No. 15, at 410 (Oct. 28, 2003). The Center for Public Integrity has published two
particularly helpful resources that offer access to many of the relevant contractual documents
and organize much of the work by individual contractors: OUTSOURCING THE PENTAGON—
WHO’S WINNING THE BIG CONTRACTS, available at http://www.publicintegrity.org/pns/ (last
visited Mar. 26, 2005) and WINDFALLS OF WAR: U.S. CONTRACTORS IN IRAQ AND
AFGHANISTAN, available at http://www.publicintegrity.org/wow/ (last visited Mar. 26,
2005). In addition, see U.S. DEP’T OF STATE, U.S. GOVERNMENT IRAQ RECONSTRUCTION
CONTRACTS, available at http://www.state.gov/e/eb/cba/iraq/ (last visited Mar. 26, 2005).
2. One of the rare efforts to catalog contractor casualties suggests that approximately
213 coalition contractor personnel have died in Iraq. See, e.g., IRAQ COALITION CASUALTY
COUNT, IRAQ COALITION CASUALTIES: CONTRACTORS—A PARTIAL LIST, available at
http://icasualties.org/oif/Civ.aspx (last visited Mar. 26, 2005). Most experts believe the
actual number is significantly higher.
3. The prosecutions of high-level government officials, including Darleen Druyun,
Robert Neal, Richard Moran, and Kevin Marlowe, merit concern. Druyun, the former
civilian chief of Air Force acquisition, pleaded guilty on April 20, 2004 to conspiracy to
violate federal conflict-of-interest regulations, admitting that she engaged in job negotiations
with Boeing while negotiating the high-profile $20 billion tanker lease deal with Boeing.
Recently, after a polygraph test, she further admitted to helping Boeing obtain inflated prices
on several deals, describing one as a “parting gift” made to curry favor with Boeing, her
future employer. See George Cahlink, Deal Breaker, GOV’T EXECUTIVE, May 15, 2004, at
19; Renae Merle & Jerry Markon, Ex-Air Force Official Gets Prison Time, WASH. POST,
Oct. 2, 2004, at A1; Renae Merle & Jerry Markon, Ex-Pentagon Official Admits Job Deal;
Civilian Got Boeing Offer While Overseeing Air-Tanker Contract, WASH. POST, Apr. 21,
2004, at A1. Neal, the former head of the Pentagon’s Office of Small and Disadvantaged
Business Utilization, was convicted after being charged with conspiracy, extortion, money
laundering, witness tampering, and obstruction of justice. See Jerry Markon, 2 Pentagon
Officials Get 24 Years in Fraud, WASH. POST, Dec. 13, 2003, at B3; Jerry Seper, Pentagon
Ex-Officials Accused of Corruption, WASH. TIMES, Oct. 19, 2002, at A1. Moran, the former
commander of the United States Army Contracting Command Korea (a position that allowed
him to oversee more than $300 million worth of contracts), was indicted on July 3, 2002 for
soliciting $850,000 worth of bribes from two South Korean companies. He pleaded guilty to
two counts of conspiracy and one count of bribery. See Press Release, U.S. Dep’t of Justice,
U.S. Army Colonel, Four Others Indicted in Scheme to Collect Bribes From South Korean
Companies Seeking to Obtain Large Military Contracts (July 3, 2002), http://www.usdoj.
gov/usao/cac/pr2002/103.html (last visited Mar. 26, 2005); Press Release, U.S. Dep’t of
Justice, U.S. Army Colonel Sentenced to Prison for Taking Bribes from South Korean
Companies Seeking Military Contracts (June 9, 2003), http://www.usdoj.gov/usao/cac/pr

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they cannot be dismissed so easily as anomalies.
The Abu Ghraib abuses suggest at least two matters that cry out for
government-wide attention and intervention. First, the federal government must
devote more resources to contract administration, management, and oversight.
This investment is an urgent priority given the combination of the 1990s
congressionally-mandated acquisition workforce reductions and the Bush
administration’s relentless pressure to accelerate the outsourcing trend.4
Second, the proliferation of interagency indefinite-delivery contract vehicles
and the perverse incentives that derive from these fee-based purchasing
vehicles have prompted troubling pathologies in public contracting that require
correction and constraint.
I. THE RUSH TO OUTSOURCE
No one should be surprised to find contractors involved in almost every
aspect of the U.S. government’s efforts in Iraq. No shortage of recent literature
focuses upon the outsourcing phenomenon, particularly from a public policy
perspective.5 Outsourcing, or its more palatable pseudonym, “competitive
2003/088.html (last visited Mar. 26, 2005). Marlowe, a Defense Information Systems
Agency senior contracting officer, was indicted for allegedly using a government purchase
card to steer $11 million in business to a company in which he had a secret financial interest.
In return, Marlowe and his family allegedly received $500,000 and other benefits from the
company. See Katherine McIntire Peters, Senior Defense Contracting Officer, Three Others,
Indicted for Corruption, GOV’T EXECUTIVE, Aug. 20, 2004, http://www.govexec.com/daily
fed/0804/082004kp1.htm (last visited Mar. 26, 2005); Press Release, U.S. Dep’t of Justice,
Senior Government Official, Local Attorney and Others Charged in Defense Procurement
Fraud Case (Aug. 18, 2004), http://www.dodig.osd.mil/IGInformation/IGInformation
Releases/PR-Marlowe8_18_04.pdf (last visited Mar. 26, 2005).
4. For a discussion of some of these issues at a more macro level, see, for example,
Steven L. Schooner, Competitive Sourcing Policy: More Sail than Rudder, 33 PUB. CONT.
L.J. 263 (2004); see also Dan Guttman, Governance by Contract: Constitutional Visions;
Time for Reflection and Choice, 33 PUB. CONT. L.J. 321 (2004).
5. See, e.g., PHILLIP J. COOPER, GOVERNING BY CONTRACT: CHALLENGES AND
OPPORTUNITIES FOR PUBLIC MANAGERS (2003); MARKET BASED GOVERNANCE: SUPPLY SIDE,
DEMAND SIDE, UPSIDE, AND DOWNSIDE (John D. Donahue & Joseph S. Nye, Jr. eds., 2002);
THE PROCUREMENT REVOLUTION (Mark A. Abramson & Roland S. Harris III eds., 2003)
(particularly chapters 1, 3, and 5-7). Recent symposia have grappled with a host of related
issues. See, e.g., Symposium, Accountability and Democracy in the Era of Privatization, 28
FORDHAM URB. L.J. 1319 (2001); Symposium, New Forms of Governance: Ceding Power to
Private Actors, 49 UCLA L. REV. 1687 (2002); Single Subject Issue, Privatization and
Outsourcing, 30 PUB. CONT. L.J. 551 (2001); Symposium, Public Values in an Era of
Privatization, 116 HARV. L. REV. 1211 (2003). Scholars also have exposed more of the
thorny issues implicated when governments, at the federal, state, and local level, rely on the
private sector. See, e.g., Jody Freeman, The Contracting State, 28 FLA. ST. U. L. REV. 155
(2000) (discussing accountability mechanisms in contracts and the conflict between public
law norms and private law principles); Gillian E. Metzger, Privatization as Delegation, 103
COLUM. L. REV. 1367, 1371 (2003) (“[C]onstitutional law’s current approach to privatization
is fundamentally inadequate in an era of increasingly privatized government.”); Sydney A.
Shapiro, Outsourcing Government Regulation, 53 DUKE L.J. 389 (2003) (suggesting that

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sourcing,” is one of five government-wide initiatives in the Bush management
agenda.6 The administration has done little to mask its preference for
outsourcing, aggressively relying on contractor personnel in lieu of government
employees or soldiers.7 While fear of a public backlash may have slowed the
administration’s domestic outsourcing efforts,8 New York Times columnist Paul
governments employ a transaction cost or make-or-buy analysis in determining whether to
outsource governmental regulation); Dru Stevenson, Privatization of Welfare Services:
Delegation by Commercial Contract, 45 ARIZ. L. REV. 83, 130 (2003) (“[I]n the debate about
which government services are best-suited for private enterprise, . . . welfare services should
be . . . last in line. The policy goals are simply too complex and, in a democratic society,
conflicted.”). A wealth of contemporary comparative scholarship examines lessons learned
from experiences outside the United States. See, e.g., Lauren Page Ambinder et al., The
Mirage Becomes Reality: Privatization and Project Finance Developments in the Middle
East Power Market, 24 FORDHAM INT’L L.J. 1029 (2001); Alessandro Ancarani, The Impact
of Public Firms Commercialisation on Purchasing Management, 3 J. PUB. PROCUREMENT
357 (2003); Bernard Black et al., Russian Privatization & Corporate Governance: What
Went Wrong?, 52 STAN. L. REV. 1731 (2000); Ellen Dannin, To Market, To Market:
Legislating on Privatization and Subcontracting, 60 MD. L. REV. 249, 249 n.a1 (2001)
(containing a wealth of sources relating to privatization in New Zealand in the author’s
biographical footnote); Hester Lessard, The Empire of the Lone Mother: Parental Rights,
Child Welfare Law, and State Restructuring, 39 OSGOODE HALL L.J. 717 (2001); Ewell E.
Murphy, Jr., The Prospect for Further Energy Privatization in Mexico, 36 TEX. INT’L L.J. 75
(2001); Tony Prosser, Public Service Law: Privatization’s Unexpected Offspring, 63 LAW &
CONTEMP. PROBS. 63 (2000); Yua Wei, Corporatization and Privatization: A Chinese
Perspective, 22 NW. J. INT’L L. & BUS. 219 (2002).
6. See, e.g., OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE OF THE PRESIDENT, THE
PRESIDENT’S MANAGEMENT AGENDA: FISCAL YEAR 2002 4, 17-18 (2001), http://www.white
house.gov/omb/budget/fy2002/mgmt.pdf (last visited Mar. 26, 2005). “President Bush is a
major advocate of . . . hiring private firms to do the government’s work—and implemented
this policy in Texas while he was governor . . . .” Stevenson, supra note 5, at 83 (citing
David J. Kennedy, Due Process in a Privatized Welfare System, 64 BROOK. L. REV. 231, 232
(1998) (“Governor Bush’s effort to privatize most of Texas’ welfare system, in turn, seemed
rooted in his attempt to make a name for himself with the kind of bold experimentation that
could carry him to national office.”)); see also Matthew Diller, Form and Substance in the
Privatization of Property Programs, 49 UCLA L. REV. 1739, 1763 (2002) (“Governor Bush
sought to hand the administration of the state’s welfare system over to . . . Lockheed
Martin . . . and Electronic Data Systems . . . .”).
7. The administration repeatedly offered eye-catching quotas for the number of
government employees to be cut. See, e.g., OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE
OF THE PRESIDENT, BUDGET OF THE UNITED STATES GOVERNMENT: FISCAL YEAR 2004 7, 39
(2003), http://www.whitehouse.gov/omb/budget/fy2004/pdf/budget.pdf (last visited Mar. 26,
2005) (indicating that the Defense Department and the Department of Veterans Affairs
planned to outsource 55,000 civilian positions in 2003); see also Christopher Lee, Army
Outsourcing Plan Decried, WASH. POST, Dec. 21, 2002, at A4 (suggesting that the plan
could affect more than one of every six Army jobs).
8. Today, these quotas are unofficial and internal. See, e.g., Christopher Lee, OMB to
Drop Quotas for Outsourcing of Jobs, WASH. POST, July 25, 2003, at A23 (noting that
skeptics “said OMB officials could still impose de facto quotas by refusing to bless agency
plans that do not meet the old goals”). Nonetheless, the quotas remain the policy’s primary
purpose. See, e.g., OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE OF THE PRESIDENT,
COMPETITIVE SOURCING: REASONED AND RESPONSIBLE PUBLIC-PRIVATE COMPETITION:
AGENCY ACTIVITIES: A SUPPLEMENT TO THE JULY 2003 REPORT (2003), http://www.white

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Krugman aptly suggests that:
in Iraq, where there is little public or congressional oversight, the
administration has privatized everything in sight . . . . [Particularly shocking]
is the privatization of purely military functions . . . . It’s one thing to have
civilians drive trucks and serve food; it’s quite different to employ them as
personal bodyguards to U.S. officials, as guards for U.S. government
installations, and . . . as interrogators in Iraqi prisons.9

Peter Singer, whose recent book Corporate Warriors10 has become
required reading in light of the government’s practices in Iraq, raises similar
policy concerns. In a Washington Post article, he noted:
Confronting the problem of controlling private contractors requires
challenging a common myth—that outsourcing saves money. This philosophy
stems from a wide craze of privatizing government services that began long
before President Bush took office. But hiring private employees in Iraq at pay
rates several times more than what soldiers make, plus paying the overhead at
the private firms, has never been about saving money. It’s more about
avoiding tough political choices concerning military needs, reserve call-ups
and the human consequences of war.11

house.gov/omb/procurement/comp_sourc_addendum.pdf (last visited Mar. 26, 2005). Table
1 details the “OMB Estimates of Commercial Activities at Agencies Tracked under the
PMA” indicating each agency’s total workforce, the number of full-time-equivalents (FTEs)
performing commercial activities, the total number of those FTEs available for competition,
and the percentage of the total workforce that this number represents. See id. at 10. Various
legislative initiatives have impeded implementation of the new rules. One of the most
dramatic examples was the successful Van Hollen amendment to H.R. 2989, the 2004
Transportation and Treasury Appropriation, which stated that “[n]one of the funds made
available by this Act may be used to implement the revision to Office of Management and
Budget Circular A-76 made on May 29, 2003.” 150 CONG. REC. H7138 (daily ed. Sept. 14,
2004); see Christopher Lee, Competitive Sourcing Plan Hits Snag: House Votes Against
Rules that Would Speed Up Competition for Federal Jobs, WASH. POST, Sept. 11, 2003, at
A21. In late October, this matter went to conference after the Senate approved an
amendment by Senator George Voinovich, which imposed a different set of constraints upon
the A-76 process. Senate Votes to Allow Federal Workers to Protest A-76 Competitions in
Funding Bill, 80 Fed. Cont. Rep. (BNA) No.15, at 389 (Oct. 28, 2003); see also
Truthfulness, Responsibility, and Accountability in Contracting Act (TRAC), H.R. 721,
107th Cong. § 2 (Feb. 14, 2001) (intending to limit outsourcing until the costs and benefits
were analyzed and garnering the support of 190 co-sponsors); OMB Urged to Halt NIH Job
Competitions, 45 GOV’T CONTRACTOR ¶ 436 (2003) (raising concerns that “this aggressive
approach to Circular A-76 is undermining the advancement of science”).
9. Paul Krugman, Battlefield of Dreams, N.Y. TIMES, May 4, 2004, at A29.
10. P.W. SINGER, CORPORATE WARRIORS: THE RISE OF THE PRIVATIZED MILITARY
INDUSTRY (2003).
11. P.W. Singer, The Contract the Military Needs to Break, WASH. POST, Sept. 12,
2004, at B3 (emphasis added). I agree with those who dismiss the optimistic projections of
outsourcing-based savings, particularly because there is a dearth of empirical evidence
linking potential savings with actual or historical savings. See, e.g., SUSAN M. GATES &
ALBERT A. ROBBERT, RAND NAT’L DEFENSE RES. INST., PERSONNEL SAVINGS IN
COMPETITIVELY SOURCED DOD ACTIVITIES: ARE THEY REAL? WILL THEY LAST? xiv (2000)
(“[P]rojected personnel cost savings are substantial in both in-house and contractor wins [of
sourcing contracts], ranging from 30 to 60 percent.”); Max B. Sawicky, Show Me the

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In Iraq, our military relies upon contractor personnel not only for
transportation, shelter, and food, but also for unprecedented levels of battlefield
and weaponry operation, support, and maintenance.12 Accordingly, defense
experts now recognize that, without contractors, our military simply cannot
project its awesome technical superiority abroad. But highly publicized
incidents of prisoner abuse raise fundamental questions particularly with regard
to the tasking of contractor personnel and the oversight of their performance.13
Money: Evidence Is Sorely Lacking that the Bush Administration’s Proposed A-76 Rules for
Contracting Will Bring Budget Savings, ECON. POL’Y INST. BRIEFING PAPER (2003),
http://www.epinet.org/briefingpapers/145/bp145.pdf (last visited Mar. 26, 2005) (asserting,
among other things, that (1) the costs savings do not necessarily derive from examples that
are representative of the types of work that may be contracted in the future; (2) the case
studies were cherry-picked and, accordingly, provide better results than a random survey
would reveal; and (3) the cost savings fail to recognize costs “shifted to other federal
agencies or the taxpayer”). Moreover, the Defense Department Inspector General suggested
that the pressure to outsource ultimately results in increased costs. See OFFICE OF THE
INSPECTOR GEN., DEP’T OF DEF., REPORT D-2000-088, DOD ACQUISITION WORKFORCE
REDUCTION TRENDS AND IMPACTS 18 (2000) [hereinafter REPORT D-2000-088]; Keith
Hartley, The Economics of Military Outsourcing, 11 PUB. PROCUREMENT L. REV. 287, 290
(2002) (suggesting that transaction costs are “[a] central feature of outsourcing and the
economics of contracting” and that “the transaction cost analysis shows that the costs of
managing contracts, including arranging bids, monitoring outcomes, and taking legal action
for contract failures, may offset any efficiency savings”); see also ELLIOTT D. SCLAR, YOU
DON’T ALWAYS GET WHAT YOU PAY FOR: THE ECONOMICS OF PRIVATIZATION (2000).
12. These services range from the huge Logistics Civil Augmentation Program
(LOGCAP) contract with Halliburton subsidiary, Kellogg Brown & Root (KBR), to the
security services provided by Blackwater for Ambassador Paul Bremer. See, e.g., ARMY
MATERIAL COMMAND, LOGISTICS CIVIL AUGMENTATION PROGRAM, available at http://www.
amc.army.mil/LOGCAP (last visited Mar. 26, 2005). Paul J. Kern describes the program:
LOGCAP is about providing support to our troops and this support covers the full logistics
spectrum. Some of the more critical functions include laundry and bath, facilities and
billeting, clothing exchange and repair, waste and sanitation, food service, mortuary affairs,
supply support, maintenance, transportation and distribution, and power generation and
distribution to list but a few.

The Complex Task of Coordinating Contracts Amid Chaos: The Challenges of Rebuilding a
Broken Iraq: Hearing Before the House Comm. on Gov’t Reform, 108th Cong. 3 (2004)
(statement of Paul J. Kern, Commanding General, U.S. Army Material Command),
http://reform.house.gov/UploadedFiles/Army%20Material%20-%20Kern%20Testimony.pdf
(last visited Mar. 26, 2005); see also Website of Blackwater Security Consulting, available
at http://www.blackwatersecurity.com/dospsd.html (last visited Mar. 26, 2005); Website of
Blackwater USA, available at http://www.blackwaterusa.com/ (last visited Mar. 26, 2005).
13. By no means have all of the legal issues associated with contractors on the
battlefield been resolved. See, e.g., Brian H. Brady, Notice Provisions for United States
Citizen Contractor Employees Serving with the Armed Forces of the United States in the
Field: Time to Reflect Their Assimilated Status in Government Contracts?, 147 MIL. L. REV.
1 (1995); Michael J. Davidson, Ruck Up: An Introduction to the Legal Issues Associated
with Civilian Contractors on the Battlefield, 29 PUB. CONT. L.J. 233 (2000); Karen L.
Douglas, Contractors Accompanying the Force: Empowering Commanders with Emergency
Change Authority, 55 A.F. L. REV. 127 (2004); Hartley, supra note 11; Steven B. Hilkowitz,
Contractors on the Battlefield, 44 CONT. MGMT. 24 (2004); James J. McCullough &
Courtney J. Edmonds, Contractors on the Battlefield Revisited: The War in Iraq & Its
Aftermath, 04-6 BRIEFING PAPERS 1 (May 2004); Todd S. Milliard, Overcoming Post-

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II. TROUBLING ANECDOTES FROM ABU GHRAIB
The disturbing allegations of prisoner abuse at the Abu Ghraib prison
become all the more unsettling because, unfortunately, they involve contractor
personnel. The widely circulated Fay Report, which concludes that
“[c]ontracting-related issues contributed to the problems at Abu Ghraib
prison,”14 and the less well-known Interior Department Inspector General
report are instructive in regard to the role of contractor personnel in and around
the battle area.15
The Army relied upon two relevant contractual agreements for operations
at the Abu Ghraib prison: CACI International provided more than half of the
interrogators employed at the facility,16 while Titan supplied linguistics
personnel.17 General Fay’s assessment of the use of these contracts—and his
conclusion that more than a third of the improper incidents involved contractor
personnel—suggests the obvious: “The general policy of not contracting for
intelligence functions and services was designed in part to avoid many of the
problems that eventually developed at Abu Ghraib . . . .”18
As a threshold issue, most observers (in or out of government) object, with
good reason, to the use of contractors to perform interrogations, assuming that
prisoner interrogation is an inherently governmental function: “Concern about
which . . . activities are inherently governmental functions . . . goes back as far
as the . . . discussion in the Federalist Papers among the framers of the
Constitution over what functions are appropriate for the federal government to
exercise.”19 Although the Fay Report does not seek to resolve this issue
(instead suggesting that use of contractor personnel may be unavoidable in
Colonial Myopia: A Call to Recognize and Regulate Private Military Companies, 176 MIL.
L. REV. 1 (2003); Katherine McIntire Peters, Buck Private, GOV’T EXECUTIVE, Oct. 1, 2004,
at 40; Rebecca Rafferty Vernon, Battlefield Contractors: Facing the Tough Issues, 33 PUB.
CONT. L.J. 369 (2004).
14. The 143-page report details the results of an Army inquiry into the role of military
intelligence personnel in prisoner abuse at the Abu Ghraib prison in Iraq. MG GEORGE R.
FAY, AR 15-6 INVESTIGATION OF THE ABU GHRAIB DETENTION FACILITY AND 205TH
MILITARY INTELLIGENCE BRIGADE 52 (2004) [hereinafter FAY REPORT], http://news.findlaw.
com/nytimes/docs/dod/fay82504rpt.pdf (last visited Mar. 26, 2005). Granted, the contractrelated issues were but one of several institutional factors identified by the Fay Report,
including a failure of leadership and confusion over interrogation procedures. See id. at 8.
Ultimately, the report implicates both military personnel and civilian contractors, finding
that more than 50 people had some degree of culpability for nearly four dozen instances of
prisoner abuse occurring between July 2003 and February 2004. Id. at 7-8.
15. Id. at 47-52; Memorandum from Earl Devaney, Inspector Gen., Dep’t of Interior,
to Assistant Sec’y for Pol’y, Mgmt. & Budget (July 16, 2004) [hereinafter Interior IG
Report], http://www.oig.doi.gov/upload/CACI%20LETTER3.pdf (last visited Mar. 9, 2005).
16. FAY REPORT, supra note 14, at 48-49.
17. Id. at 48.
18. Id. at 49.
19. GEN. ACCT. OFFICE, GAO/GGD-92-11, GOVERNMENT CONTRACTORS: ARE SERVICE
CONTRACTORS PERFORMING INHERENTLY GOVERNMENTAL FUNCTIONS? 2 (1991).

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“urgent or emergency situations”), this policy question offers a window into a
long-running ad hoc battle over how our government serves the public.20 A
deep chasm separates the putative government policy expressed in the recently
revised OMB Circular A-7621—that the government should not compete with
its citizens—and a regime in which the government competes with its citizens
when monetary savings might result.22
On a less philosophical level, the Fay Report leaves no doubt that some of
the specific problems experienced in Abu Ghraib can be traced to insufficient
contractor oversight.23 The Fay Report identified two main manifestations of
the problem: a lack of training and inadequate contract management.
According to the Report, as many as thirty-five percent of the interrogators
supplied by CACI lacked formal military interrogation training.24 Even more
troubling are the indications that CACI, in a rush to fill military demands for
20. The battleground included the language in the revised OMB Circular A-76 and the
implementation of the FAIR Act. See Federal Activities Inventory Reform (FAIR) Act, Pub.
L. No. 105-270, 112 Stat. 2382 (1998); OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE OF
THE PRESIDENT, CIRCULAR NO. A-76 (REVISED), PERFORMANCE OF COMMERCIAL ACTIVITIES
(2003), 68 Fed. Reg. 32,134 (May 29, 2003) (reflecting the longstanding distinction between
inherently governmental functions (which government employees must, or at least should,
perform) and commercial activities (for which the private sector should be given the
opportunity to compete)); see also OFFICE OF MGMT. & BUDGET, EXECUTIVE OFFICE OF THE
PRESIDENT, 2003 FAIR ACT INVENTORY USER’S GUIDE (2003), http://www.whitehouse.gov/
omb/procurement/fair/2003users_guide.html (last visited Mar. 26, 2005) (explaining that
agencies must create inventories for Congress and the public “of all commercial activities
performed by federal employees”).
21. See OFFICE OF MGMT. & BUDGET, CIRCULAR NO. A-76, supra note 21.
22. Choosing between the labels “outsourcing” and “competitive sourcing” involves a
significant policy decision, rather than mere semantics. In an outsourcing regime,
government relies upon the private sector to perform its commercial activities. In other
words, if the private sector can perform a task for the government, it should. Conversely,
competitive sourcing permits existing government personnel (through the guise of a putative
“most efficient organization” or MEO) to compete with the private sector to perform the
same commercial activities. Under a competitive sourcing regime, the private sector only
should perform commercial activities if cost savings are anticipated.
23. FAY REPORT, supra note 14, at 49. Several other findings, with regard to the CACI
contract, merit attention. First, a CACI employee participated with the contracting officer’s
representative in writing the statement of work (SOW) prior to the award of the contract. As
the Fay Report notes, such a practice—what appears to be an organizational conflict of
interest (OCI)—appears to violate the Federal Acquisition Regulation (FAR). See id.; see
also FAR, 48 C.F.R. § 9.502-2 (2005). Second, it was unclear whether anyone in the Army’s
contracting or legal organizations approved the use of the blanket purchase agreement
(BPA). See FAY REPORT, supra note 14, at 49. Third, the Army general counsel’s office
concluded in May of 2004 that these and other delivery orders for interrogator services were
outside the scope of the GSA Schedule contract and should be cancelled. See id. at 48-49.
24. The government has attempted to remedy some of these ills at Abu Ghraib. See,
e.g., Ellen McCarthy, Changes Behind the Barbed Wire: New Standards Are in Place for the
Oversight of Contract Workers at Abu Ghraib Prison, WASH. POST, Dec. 13, 2004, at E01
(“Fay said the Army is making changes recommended by his panel to ensure that civilian
interrogators and contractors have qualifications and training equal to that of their military
counterparts.”).

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more personnel, failed to conduct adequate background investigations on
prospective employees before hiring them. Lack of training was not only
evident on the side of the contractors. Military personnel themselves did not
have the necessary training in the area of contract administration to adequately
monitor and oversee the contracts. If the Army plans to rely upon contractors to
provide such sensitive services as translation and interrogation, it must
maintain tight control over the operations. However, the small number of
contracting officer representatives assigned to oversee the performance of
hundreds of private employees made proper management virtually impossible.
Additionally, as discussed below, confusion permeated Abu Ghraib with regard
to who was supervising whom.25
III. INADEQUATE CONTRACT ADMINISTRATION: A FALSE ECONOMY
As the Fay Report gleaned from the Abu Ghraib experience, “it is very
difficult, if not impossible, to effectively administer a contract when the COR
[contracting officer’s representative]26 is not on site.”27 While this finding
might appear obvious, the larger point cannot be avoided. If the government
plans to rely heavily upon contractors, it must maintain, invest in, and apply
appropriate acquisition professional resources to select, direct, and manage
those contractors. Unfortunately, insufficient contract management resources
have been applied in Iraq. General Fay poignantly articulated this point:
Meaningful contract administration and monitoring will not be possible if a
small number of CORs are asked to monitor the performance of one or more
contractors who may have 100 or more employees in theater, and in some
cases, perhaps in several locations . . . . [T]he CORs do well to keep up with
the paper work, and simply have no time to actively monitor contractor
performance. It is apparent that there was no credible exercise of appropriate
oversight of contract performance at Abu Ghraib.28

Long before the prison scandal led to increased scrutiny, the government’s
failure to properly staff its contracts in Iraq was pervasive and well-known.
Last year, there was every reason to fear that the government lacked adequate
25. See infra notes 47-50.
26. “‘Contracting officer’ means a person with the authority to enter into, administer,
and/or terminate contracts . . . . The term includes certain authorized representatives of the
[CO] acting within the limits of their authority as delegated by the [CO].” FAR, 48 C.F.R. §
2.101 (2005). “[CO]s are responsible for ensuring performance of all necessary actions for
effective contracting, ensuring compliance with the terms of the contract, and safeguarding
the interests of the United States in its contractual relationships.” 48 C.F.R. § 1.602-2.
27. FAY REPORT, supra note 14, at 50 (footnote added). The Fay Report later reiterated
that “[a]n important step in precluding the recurrence of [these types] of situations . . . is to
insure that a properly trained COR is on site.” Id. at 52.
28. Id. at 52 (emphasis added). The report states what common sense dictates: “Failure
to assign an adequate number of CORs to the area of contract performance puts the Army at
risk of being unable to control poor performance or become aware of possible misconduct by
contractor personnel.” Id.

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resources on the ground in Iraq to properly manage and administer its
contractual undertaking. Few doubted that the government lacked sufficient
personnel and mechanisms to ensure appropriate oversight of this massive
contracting enterprise.29 Sadly, a steady stream of empirical research confirms
the worst. Recent audits of Iraqi and U.S. funds awarded by the Coalition
Provisional Authority reveal the gross inadequacies underlying contract
management and administration for Iraqi reconstruction.30
Unfortunately, this problem is not unique to the Iraq contracting process.31
The federal government currently lacks sufficient numbers of qualified
acquisition professionals to conduct appropriate market research, properly plan
acquisitions, maximize competition, comply with a plethora of congressionally
imposed social policies, administer contracts to assure quality control and
guarantee contract compliance, resolve pending protests and disputes, and close
29. The Defense Department was not alone in lacking sufficient resources to manage
its requirements in Iraq. See, e.g., Jeffrey Marburg-Goodman, USAID’s Iraq Procurement
Contracts: An Insider’s View, PROCUREMENT LAW, Fall 2003, at 10. Explaining the
compromises required during a crisis, Marburg-Goodman notes:
[The FAR] constitutes the most complex, yet also the most transparent, government
purchasing code in the world. Still, the success it ensures for fundamental fairness,
transparency, and maximum competitive benefit is normally achieved at considerable costs
in time and staffing effort . . . . There is a tremendous tension between this purposely
deliberate and unhurried process and the occasional emergency needs of a government
agency.

Id.
30. See, e.g., OPEN SOCIETY INST., REVENUE WATCH: REPORT NO. 7, DISORDER,
NEGLIGENCE AND MISMANAGEMENT: HOW THE CPA HANDLED IRAQ RECONSTRUCTION FUNDS
(2004), http://www.iraqrevenuewatch.org/reports/092404.pdf (last visited Mar. 26, 2005).
As of April 12, 2004, the Coalition Provisional Authority (CPA) had awarded a staggering
$847 million worth of contracts to be paid for by the Development Fund for Iraq (DFI), a
fund made up of earnings from the sale of Iraq’s oil and gas. Id. at 7. “Although the CPA
was required to manage the DFI in a transparent manner, it chose not to apply the same
standards that apply to U.S. funds.” Id. at 3. Apparently, this decision was based on “the
‘wide uses’ of DFI along with environmental factors unique to Iraq.” Id. Even under the
more stringent procedures mandated for the allocation of U.S. money, poor contractual
oversight and management are prevalent. Therefore, it should come as no surprise that when
operating under less transparent standards, the CPA failed to properly award and monitor its
contracts:
The CPA Contracting activity had not issued standard operating procedures or developed an
effective contract review, tracking, and monitoring system. In addition, contract files were
missing and incomplete. Further, contracting officers did not always ensure that contract
prices were fair and reasonable, contractors were capable of meeting delivery schedules, and
payments were made in accordance with contract requirements.

OFFICE OF INSPECTOR GEN., COALITION PROVISIONAL AUTH., REPORT NO. 04-013, COALITION
PROVISIONAL AUTHORITY’S CONTRACTING PROCESSES LEADING UP TO AND INCLUDING
CONTRACT AWARD (2004). For a list of agencies that oversee spending on Iraqi
reconstruction, see OPEN SOCIETY INST., supra, at 13-15.
31. “For insiders in the corridors of the Pentagon, the pervasive role of contractors in
the replacement of civil servants is a given.” Dan Guttman, The Shadow Pentagon: Private
Contractors Play a Huge Role in Basic Government Work—Mostly Out of Public View
(Sept. 29, 2004), at http://www.publicintegrity.org/pns/printer-friendly.aspx?aid=386 (last
visited Mar. 26, 2005).

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out contracts.32
This point bears emphasis for two reasons. First, the GAO’s33 “prior work
has shown that when workforce reductions do not consider future needs—such
as the staff reduction at DoD [Department of Defense] during the 1990s—the
result is a workforce that is not balanced with regard to experience and skill
sets.”34 Frankly, the government did not have enough qualified contracts
professionals to meet its needs before the events of September 11th. Since that
time, despite a dramatic spike in procurement spending for homeland security
and military operations in Iraq and Afghanistan, the federal government has
failed to engage in a meaningful effort to recruit the staff necessary to manage
the government’s increased contracting burdens.
Second, given the administration’s competitive sourcing initiative, the
most rapidly growing area of procurement activity lies in service contracting.35
Successful service contracts are difficult to draft and, more importantly, require
significant resources to administer or manage. Thus: “The extent of reliance on
service contractors is not by itself a cause for concern. Agencies must, however,
have a sufficient number of trained and experienced staff to manage
Government programs properly. The greater the degree of reliance on
contractors the greater the need for oversight by agencies.”36

32. See generally Steven L. Schooner, Fear of Oversight: The Fundamental Failure of
Businesslike Government, 50 AM. U. L. REV. 627 (2001) [hereinafter Schooner, Fear of
Oversight] (discussing reduced oversight in government procurement throughout the 1990s).
Last year, the GAO conceded that the acquisition workforce has declined dramatically, while
“all agencies face the prospect of losing many of their skilled acquisition personnel over the
next 5 years—with a significant portion of the government’s acquisition workforce
becoming eligible to retire by fiscal year 2008.” GEN. ACCT. OFFICE, GAO-03-443, FEDERAL
PROCUREMENT: SPENDING AND WORKFORCE TRENDS (2003) [hereinafter GAO-03-443]; see
also REPORT D-2000-088, supra note 11.
33. Recently Congress changed the name of the General Accounting Office (GAO) to
the Government Accountability Office. GAO Human Capital Reform Act of 2004, Pub. L.
No. 108-271, § 8(a), 118 Stat. 811, 814 (2004); see also GEN. ACCT. OFFICE, GAO’S NAME
CHANGE AND OTHER PROVISIONS OF THE GAO HUMAN CAPITAL REFORM ACT, available at
http://www.gao.gov/about/namechange.html (last visited Mar. 26, 2005) (noting that the
name change “better reflects the modern professional services organization GAO has
become”).
34. GAO-03-443, supra note 33, at 22 (citing inter alia GEN. ACCT. OFFICE, GAO-01753T, CONTRACT MANAGEMENT: TRENDS AND CHALLENGES IN ACQUIRING SERVICES (2001)).
35. The government has failed to fully recognize, let alone adapt to, its increasing
reliance on service contracts. The increase is dramatic. See, e.g., COMMERCIAL ACTIVITIES
PANEL, IMPROVING THE SOURING DECISIONS OF THE GOVERNMENT 27 fig. 5 (2002),
http://www.gao.gov/a76panel/dcap0201.pdf (last visited Mar. 26, 2005) (demonstrating that,
between 1986 and 2001, the percentage of federal procurement dollars devoted to service
contracting rose from 31% to 51% of total procurement spending); see also Larry Makinson,
Outsourcing the Pentagon: Who Benefits from the Politics and Economics of National
Security?, available at http://www.publicintegrity.org/pns/report.aspx?aid=385 (last visited
Mar. 26, 2005) (showing in the figure, “The Switch to Services: Defense Contracting, 19842003,” the growth of services as a percentage of total defense contracts).
36. Policy Letter 92-1 from Office of Fed. Procurement Pol’y (OFPP), to the Heads of

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Currently, there are inadequate personnel resources, and insufficient
investment has been made to train existing personnel in required skills (such as
drafting performance-based statements of work).37 In other words, the critical
acquisition workforce problems will get worse before they get better.
Demands upon overtaxed acquisition corps lead to a triage-type focus on
buying, which has severely limited the resources available for post-award
contract administration. Agencies must apply their limited resources to meet
their most pressing needs.38 In other words, buyers face enormous pressure to
fill vacant seats with bodies. When faced with applying limited resources,
agencies focus first upon awarding contracts and less upon administering those
contracts once awarded. To be clear—the government lacks the procurement
professionals needed to manage the contractors that continue to replace
outsourced government personnel. Steve Kelman, one of the chief architects of
the 1990s acquisition reforms, now concedes that “the administration of
contracts once they have been signed has been the neglected stepchild of [the
procurement system reform] effort.”39 More broadly, the cuts diminished
internal (or government) oversight of the contracting process,40 limiting the

Executive Agencies and Departments § (7)(h) (Sept. 23, 1992), http://www.arnet.gov/Librar
y/OFPP/PolicyLetters/Letters/PL92-1.html (last visited Mar. 26, 2005) (emphasis added).
37. The Commercial Activities Panel found:
[D]ownsizing was not guided by strategic planning, nor has adequate consideration been
given to implementation challenges, such as the impact of the government’s reduction-inforce rules. Overall, the government’s human resources policies and practices have not
reflected, nor been aligned with, current workforce dynamics and challenges, including
demographics, professional development, mobility, and other issues.

COMMERCIAL ACTIVITIES PANEL, supra note 35, at 28.
38. Joseph A. Pegnato, Federal Workforce Downsizing During the 1990s: A Human
Capital Disaster, 32 PUB. MANAGER 26, 29 (Winter 2003-04) (“Some of the adverse impacts
associated with the workload imbalance include more time to award contracts, increased
program costs, insufficient staff to manage requirements, increased backlog of contracts to
close out, and personnel retention difficulty.”); see also Ralph C. Nash & John Cibinic,
Contracting Out Procurement Functions: The “Inherently Governmental Function”
Exception, 14 NASH & CIBINIC REP. ¶ 45 (2000) (wondering “whether some agencies have
enough personnel left in-house”).
39. “The most fundamental problem with the current system is that it insufficiently
recognizes contract administration as in the first instance a management function.” Steven
Kelman, Strategic Contracting Management, in MARKET BASED GOVERNANCE, supra note 5,
at 89-90, 93 (referring to the “hollow state” while citing inter alia DONALD F. KETTL,
GOVERNMENT BY PROXY: (MIS?)MANAGING FEDERAL PROGRAMS (1988)).
40. Schooner, Fear of Oversight, supra note 32, at 671-72 (including the graphic on
page 672). Between 1990 and 1999, the number of accounting and budget personnel within
the acquisition workforce fell from 17,504 to 6432, a decrease of 63%. The cumulative
reduction in these specialties is more dramatic because these figures exclude the Defense
Contract Audit Agency, whose staffing decreased from 7030 work years in FY 1990 to 3958
in FY 1999, a reduction of about 43%. Further, during the same period, the number of
quality assurance, inspection, and grading personnel fell from 12,117 to 5191, a decrease of
57%. Id.; see also RICHARD J. STILLMAN II, THE AMERICAN BUREAUCRACY: THE CORE OF
MODERN GOVERNMENT 307-09 (2d ed. 1996) (suggesting that the growth of contracting out
has “tended to accelerate numerous problems and dilemmas of managerial efficiency,

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government’s insight into how its contractors perform.
This scenario thus hides significant downstream costs and potential
performance failures. In Iraq (and, ultimately, throughout the government), it is
time to make meaningful investments in restoring, expanding, training, and
incentivizing the acquisition workforce. A related concern arises with regard to
the proliferation of personal services contracts.
IV. PERSONAL SERVICES CONTRACTS: GOVERNMENT DEPENDENCE ON
EMPLOYEE AUGMENTATION
As the administration pursued its outsourcing agenda, it ignored the longstanding congressional prohibitions against personal services contracting.
Government procurement law, policy, and practice distinguish contracts for
services (ranging from custodial or clerical to medical) from those for supplies
(including end items or widgets ranging from furniture to fighter aircraft) and
construction (including designing, building, repairing structures, or generally
improving real estate).41 Service contracts are further distinguished as personal
and nonpersonal service contracts. In a nonpersonal services contract, the
government delegates a function to a contractor. Conversely, in personal
services contracts, the government retains the function, but contractor
employees staff the effort.42
The government operates under longstanding legal and policy objections to
the use of personal services contracts.43 Yet an increasingly common form of
personal services contract is the body shop or employee augmentation
arrangement.44 As the name implies, the government uses this type of contract
to hire contractor personnel to replace, supplement, or work alongside civil
servants or members of the armed forces. This is the antithesis of the
government’s preferred approach, known as performance-based service
contracting (PBSC).45 As a matter of practice and necessity, however, the
oversight, and accountability”).
41. A service contract “directly engages the time and effort of a contractor whose
primary purpose is to perform an identifiable task rather than to furnish an end item of
supply.” FAR, 48 C.F.R. § 37.101 (2005) (emphasis added).
42. “‘Nonpersonal services contract’ means a contract under which the personnel
rendering the services are not subject, either by the contract’s terms or by the manner of its
administration, to the supervision and control usually prevailing in relationships between the
Government and its employees.” 48 C.F.R. § 37.101. “A personal services contract is
characterized by the employer-employee relationship it creates between the Government and
the contractor’s personnel.” 48 C.F.R. § 37.104(a).
43. The basic procurement regulation explains that “[a]gencies shall not award
personal services contracts unless specifically authorized by statute . . . to do so.” 48 C.F.R.
§ 37.104(b).
44. This poses an interesting pedagogical challenge in the law school classroom, at
least until the statutes and regulations are amended to conform to current practice.
45. 48 C.F.R. § 37.102(a) (1983) (citing Pub. L. No. 106-398, § 821 and crossreferencing 40 U.S.C. §§ 541-544). See generally Policy Letter 91-2, from Office of Fed.

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federal government today relies heavily upon employee augmentation
contracts.46 The experience in Iraq is not dramatically different from what
occurs daily in government offices and organizations across the United States.
Civil servants work alongside, with, and at times, for, contractor employees
who sit in seats previously occupied by government employees. But no one
stopped to train the government workforce on how to operate in such an
environment. For example, the Fay Report notes that the use of contractor
personnel, “hired in an attempt to address shortfalls,” contributed to the lack of
unit integrity in the Joint Interrogation and Detention Center (JIDC), which the
Report described as a “fatal flaw.”47
One of the most troubling aspects of using contractor personnel to augment
government personnel shortfalls is that, all too often, the contractor personnel
lack appropriate training to replace government personnel, and government
personnel lack appropriate training to supervise the contractor personnel.
Another indication of the apparent inadequacy of on-site contract management
and lack of contract training is the apparent lack of understanding of the
appropriate relationship between contractor personnel, government civilian

Procurement Pol’y, to the Heads of Executive Agencies and Departments (Apr. 9, 1991),
[hereinafter OFPP Policy Letter 91-2] http://www.arnet.gov/Library/OFPP/PolicyLetters/
Letters/PL91-2_4-9-91.html (last visited Mar. 26, 2005) (commencing the government’s
initiative officially). In addition, see GEN. ACCT. OFFICE, GAO-02-1049, CONTRACT
MANAGEMENT: GUIDANCE NEEDED FOR USING PERFORMANCE-BASED SERVICE CONTRACTING
1 (2002) (“To achieve greater cost savings and better outcomes . . ., the Congress and the
administration have encouraged greater use of performance-based service contracting.”).
Performance-based service contracting (PBSC) emphasizes that all aspects of an acquisition
be structured around the purpose of the work to be performed as opposed to the manner in
which the work is to be performed . . . . It is designed to ensure that contractors are given
freedom to determine how to meet the Government’s performance objectives, that
appropriate performance quality levels are achieved, and that payment is made only for
services that meet these levels.

OFFICE OF MGMT. & BUDGET, OFFICE OF FED. PROCUREMENT POL’Y, A GUIDE TO BEST
PRACTICES FOR PERFORMANCE-BASED SERVICE CONTRACTING 4 (1998) [hereinafter BEST
PRACTICES GUIDE], http://www.arnet.gov/Library/OFPP/BestPractices/PPBSC/BestPPBSC.
html (last visited Mar. 26, 2005). “Agencies shall, to the maximum extent practicable,
describe the work in terms of ‘what’ is to be the required output rather than ‘how’ the work
is to be accomplished.” OFPP Policy Letter 91-2, supra, § 5(a). “The PBSC [work
statement] describes the effort in terms of measurable performance standards (outputs).
These standards should include such elements as ‘what, when, where, how many, and how
well’ the work is to be performed.” BEST PRACTICES GUIDE, supra, at 7; see also OFFICE OF
DEPUTY UNDER SEC’Y OF DEF. FOR ACQUISITION REFORM, PERFORMANCE-BASED SERVICE
ACQUISITION 11 (2001), http://www.dau.mil/pubs/misc/pbsa.asp (last visited Mar. 26, 2005).
46. This reliance is driven by the juxtaposition of two trends: (1) increased
government downsizing and (2) the targeted acquisition workforce reductions discussed
above.
47. FAY REPORT, supra note 14, at 9. The government’s failure to train its workforce to
operate in such a fluid, highly integrated environment concerns the nation’s public policy
schools and scholars who study the “new public management.” See, e.g., John Forrer &
James Edwin Kee, Public Servants as Contract Managers?, 33 PUB. CONT. L.J. 361 (2004).

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employees, and military personnel.48
More specifically, the Fay Report found that “[n]o training is conducted at
any level . . . on the employment of contract interrogators in military
operations . . . . [The government’s] interrogators, analysts, and leaders were
unprepared for the arrival of contract interrogators and had no training to fall
back on in the management, control, and discipline of these personnel.”49
Moreover, within Abu Ghraib, it appears that the parties involved lacked a
sense “of the appropriate relationship between contractor personnel,
government civilian employees, and military personnel. Several people
indicated . . . that contractor personnel were ‘supervising’ government
personnel or vice versa.”50 This confusion demonstrates the very scenario that
the personal services prohibition was intended to avoid.51
The worst-case scenario arises where a contractor performs work under an
open-ended contract (for example, with a vague or ambiguous statement of
work) without guidance or management from a responsible government official
(for example, in the absence of an administrative contracting officer or a
contracting officer’s representative).52 The Fay investigation did well to draw
48. FAY REPORT, supra note 14, at 51.
49. Id. at 19. Nor was there an established curriculum from which the government
could have drawn for its training. The Fay Report found:
No doctrine exists to guide interrogators and their intelligence leaders . . . in . . . contract
management or command and control of contractors in a wartime environment. These
interrogators and leaders faced numerous issues involving contract management: roles and
responsibilities of [government] personnel with respect to contractors; roles, relationships,
and responsibilities of contract[or personnel] . . . with military personnel; and the methods of
disciplining contractor personnel . . . .

Id. Moreover, there was no standardization of the contractor interrogator training. To the
extent that the contract required that contractor personnel have training equivalent to
government interrogators, “no one was monitoring the contractor’s decision as to what was
considered ‘equivalent.’” Id. at 51.
50. Id. at 51. For example, the Fay Report identifies two organization charts that listed
contractor employee supervisors with military subordinates. Id. at 52.
51. The regulatory regime anticipates that government personnel manage contracts but
do not directly supervise individual contractor employees; nor do contractor employees
directly report to government personnel. For various reasons, including standards of conduct
and compensation regimes, contractor personnel differ from civil servants. “The
Government is normally required to obtain its employees by direct hire under competitive
appointment or other procedures required by the civil service laws. Obtaining personal
services by contract, rather than by direct hire, circumvents those laws unless Congress has
specifically authorized acquisition of the services by contract.” FAR, 48 C.F.R. § 37.104(a)
(2005).
52. A simple example illustrating this principle can be found in the BTG/Titan
contract for linguists. Because the purpose of the contract was to provide linguists, the
contract does not contemplate that contractor personnel might conduct interrogations.
Accordingly, nothing in the contract required BTG/Titan personnel to review or sign the
interrogation rules of engagement. FAY REPORT, supra note 14, at 48. The report continues:
Proper oversight did not occur at Abu Ghraib due to a lack of training and inadequate
contract management and monitoring. Failure to assign an adequate number of CORs to the
area of contract performance puts the Army at risk of being unable to control poor
performance or become aware of possible misconduct by contractor personnel. . . . The Army

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attention to the oversight vacuum. It is troubling to learn that the officer in
charge of interrogations received no parameters or guidance for use of
contractor personnel, was unfamiliar with the contract’s terms and procedures,
made no mention of a government contracting officer’s representative, and
understood her primary point of contact to be the contractor’s on-site
manager.53 Sadly, this scenario is all too common today.
V. FLEXIBLE FEE-BASED ACQUISITION INSTRUMENTS: UNANTICIPATED
EXTERNALITIES
These problems are exacerbated by the proliferation of fee-based
arrangements that permit government agencies to avoid longstanding
contracting constraints by off-loading their procurement function to other
agencies. No doubt, most Americans are surprised to learn that the military
relied upon the Department of the Interior’s National Business Center (NBC)54
to procure contractor personnel to conduct interrogations in Iraq and
Guantanamo Bay.55
Yet it is no surprise that problems continue to arise under these immensely
popular, highly-flexible contractual vehicles—indefinite-delivery/indefinitequantity (ID/IQ) contracts. While these vehicles undoubtedly streamline the
procurement process, concerns regarding their misuse are neither new nor
novel.56 Numerous GAO and IG reports disclose agency practices in awarding
needs to take a much more aggressive approach to contract administration and management
if interrogator services are to be contracted . . . .

Id. at 52.
53. Id. at 50.
54. It is difficult to get a sense of the mission, purpose, or mandate of the National
Business Center (NBC). For example, a visit to the NBC’s website indicates that its new or
expanded customers include: (1) the Public Defender Service of the District of Columbia
(PDS), a federally funded, independent agency of the District of Columbia; (2) the
Millennium Challenge Corporation (MCC), a new government corporation, which provides
U.S. foreign development assistance to countries that adopt pro-growth strategies for
meeting political, social, and economic challenges; and (3) the African Development
Foundation (ADF), a government corporation, which provides small grants directly to
private organizations in Africa to carry out sustainable self-help development activities in an
environmentally sound manner. See generally Website of National Business Center, at
http://www.nbc.gov (last visited Mar. 26, 2005). Like a commercial firm, to the extent that
“[t]he NBC operates on a full cost-recovery business basis,” it must generate fees. Id. at
Overview. Unlike a commercial firm, one might expect its ultimate purpose to derive from a
congressional authorization in some way related to the Interior.
55. Interior IG Report, supra note 15, at 3. The Guantanamo Bay effort involved
“intelligence analysis and strategic debriefing services” with regard to the approximately
600 people detained during the government’s military action in Afghanistan. Hamdi v.
Rumsfeld, 124 S. Ct. 2633 (2004).
56. See, e.g., Michael J. Benjamin, Multiple Award Task and Delivery Order
Contracts: Expanding Protest Grounds and Other Heresies, 31 PUB. CONT. L.J. 429 (2002);
Karen DaPonte Thornton, Fine Tuning Acquisition Reform’s Favorite Procurement Vehicle,
the Indefinite Delivery Contract, 31 PUB. CONT. L.J. 383 (2002).

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task and delivery order contracts which, almost uniformly, include insufficient
competition and poorly justified sole-source awards.57 In principle, contractors
are supposed to compete to become part of an “umbrella contract,” which
offers them little more than the opportunity to compete for individual task or
delivery orders. Unfortunately, the anticipated competition rarely materializes;
agencies tend to include all comers on the contract vehicle. This makes sense,
to the extent that inclusion on the contract is no more than an opportunity to
compete, akin to a “hunting license.” Yet real competition also proves absent
during the task-order stage. Because all “contract holders” may market their
services directly to individual agencies, those agencies—affected by
considerations including speed, convenience, personal preference, and human
nature—frequently obtain those services on a sole source or noncompetitive
basis from those possessing these hunting licenses. As a result, legitimate
competition infrequently materializes.58
Moreover, as the Interior Department Inspector General (IG) concluded in
this case, the pursuit of fees distorts the moral compass that we would
otherwise hope to animate federal government procurement officials. The
Interior IG correctly perceived the “[i]nherent conflict in a fee-for-service
operation, where procurement personnel in the eagerness to enhance
organization revenues have found shortcuts to Federal procurement procedures
and procured services for clients whose own agencies might not do so.”59
This point merits elaboration. The federal procurement statutes and
regulations assume a model in which agencies rely upon warranted purchasing
professionals to procure their needed supplies and services.60 This longstanding
arrangement bifurcates programmatic authority from procurement authority—
in other words, program or project managers (PMs) must rely upon contracting
officers (COs) to fulfill their requirements. Our procurement regime assumes
that COs will be familiar with, understand, and follow congressional mandates
and effectuate the government’s procurement policies in making these
purchases. Contracting officers are expected to meet the PM’s needs, but only

57. Section 803 of the 2002 Defense Authorization Act was intended to rein in some
of these practices. See Defense Federal Acquisition Regulation Supplement; Competition
Requirements for Purchase of Services Under Multiple Award Contracts, 67 Fed. Reg.
15,351 (Apr. 1, 2002) (to be codified at 48 C.F.R. pts. 208 and 216); Defense Federal
Acquisition Regulation Supplement; Competition Requirements for Purchase of Services
Under Multiple Award Contracts, 67 Fed. Reg. 65,505 (Oct. 25, 2002) (to be codified at 48
C.F.R. pts. 208 and 216). “It remains to be seen, however, whether these new regulations
will enhance competition because agencies often have disregarded the existing FAR
provisions . . . .” Steven N. Tomanelli, Feature Comment: New Law Aims to Increase
Competition for and Oversight of DOD’s Purchases of Services on Multiple Award
Contracts, 44 GOV’T CONTRACTOR ¶ 107 (2002).
58. See generally GEN. ACCT. OFFICE, GAO/NSIAD-00-56, CONTRACT MANAGEMENT:
FEW COMPETING PROPOSALS FOR LARGE DOD INFORMATION TECHNOLOGY ORDERS 4 (2000).
59. Interior IG Report, supra note 15, at 3.
60. See, e.g., FAR, 48 C.F.R. § 1.6 (2005).

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within the established constraints of the procurement system.
Unfortunately, perverse incentives associated with flexible, interagency,
fee-based acquisition vehicles turn this system on its head. Various statutory
schemes, dating back to the Economy Act,61 permit interagency transfers,62
such as allowing one agency to conduct a purchase for another.63 Of particular
relevance here, the Clinger-Cohen Act64 resulted in a proliferation of
government-wide acquisition contracts, popularly known as GWACs.65 While
the Economy Act authorizes interagency transfers, the statute “permit[s] an
agency to take advantage of another agency’s expertise, not merely to offload
work, funds, or both to avoid legislative restrictions.”66 One of the most
common violations of this prohibition is “parking” funds before they expire.67
As the end of the fiscal year approaches, agencies “park” or “dump” funds68 by
61. In 1932, Congress intended the Economy Act, 31 U.S.C. §§ 1535-1536 (2005), to
generate economies of scale by reducing redundant activities of many government agencies.
62. See, e.g., Federal Property and Administrative Services Act (FPASA), 40 U.S.C. §
481(a)(3) (2005); Project Order Statute, 41 U.S.C. § 23 (2005).
63. Within the Defense Department, interagency orders typically are executed by
issuing a DD Form 448, Military Interdepartmental Purchase Request (MIPR), http://web1.
whs.osd.mil/forms/DD0448.PDF (last visited Mar. 26, 2005).
64. National Defense Authorization Act for Fiscal Year 1996, Pub. L. No. 104-106, §
5112(e), 110 Stat. 186 (1996) (codified at 40 U.S.C. § 1412(e) (2005)). The Federal
Acquisition Reform Act (FARA) and the Information Technology Management and Reform
Act (ITMRA) were renamed as the Clinger-Cohen Act of 1996.
65. Government-wide acquisition contract (GWAC) is a task-order or delivery-order
contract for information technology established by one agency for government-wide use that
is operated (1) by an executive agent designated by OMB pursuant to the Clinger-Cohen Act
§ 5112(e), 40 U.S.C. § 11302(e) (2005) or (formerly) (2) under a Brooks Act delegation, 40
U.S.C. § 759 (repealed by Pub. L. No. 104-106). The Economy Act does not apply to orders
against GWACs. FAR, 48 C.F.R. § 2.101 (2005). Pursuant to § 5112(e) the OMB Director
designated GSA as the executive agent for certain government-wide acquisitions of
information technology (IT). The scope of the designation is limited to programs funded on
a reimbursable basis through the Information Technology Fund established by 40 U.S.C. §
322 (2005). These programs include the Federal Systems Integration and Management
Center (FEDSIM) and the Federal Computer Acquisition Center (FEDCAC), as well as
other existing government-wide IT acquisition programs. The OMB designation, in
combination with 40 U.S.C. § 322, provides separate authority for acquisition from these
GSA programs and states that the “Treasury and Information Technology Fund [hereinafter
the Fund] . . . shall be available without fiscal year limitation.”
66. STEVEN N. TOMANELLI, APPROPRIATIONS LAW: PRINCIPLES & PRACTICE 371 (2003).
67. At the end of the fiscal year, appropriated but unobligated annual funds expire or
“cease to be available for . . . new obligations.” These funds then reside in an “expired
account” for five years during which time they are available to “liquidate obligations
properly chargeable to the account prior to its expiration.” Afterwards, the expired account is
closed and the unexpended balance returns to the general fund of the Treasury (which, in
reality, is a mere bookkeeping adjustment, since the money “never [left] the Treasury to
begin with”). GEN. ACCT. OFFICE, OFFICE OF THE GEN. COUNSEL, PRINCIPLES OF FEDERAL
APPROPRIATIONS LAW 5-67 to 5-73 (3d ed. 2004).
68. For example, fearing that some of its appropriated funds might expire before the
end of the fiscal year (and thus be lost to it forever), a hypothetical agency (A) might
“spend” its remaining appropriation by transferring it into agency B’s revolving fund. The

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issuing open-ended or vague orders that do not state a specific and definite
requirement69 or identify a bona fide need.70 However, the Economy Act (or
similar inter-agency purchasing regimes)71 was not intended to facilitate the
avoidance of competition.72
The problem arises because fee-based purchasing offices (for example, the
servicing agency) need revenue to survive.73 In other words, revolving funds
receiving agency (B) then holds or parks the funds in its revolving fund, where the funds do
not expire with the fiscal year’s conclusion. Subsequently, consistent with A’s wishes, B
retains and reimburses a contractor (out of the revolving fund, using what otherwise would
be expired funds) to perform services for A. A is pleased to receive services that, pursuant to
conventional fiscal law, it could not afford to purchase. B willingly obliges A because B
skims an administrative or franchise fee off the top of the transaction which, in turn, funds
(or potentially grows) B’s operations. See, e.g., Implementation of the Library of Congress
FEDLINK Revolving Fund, Comp. Gen. B-288142 (Sept. 6, 2001); Continued Availability
of Expired Appropriation for Additional Project Phases, Comp. Gen. B-286929 (Apr. 25,
2001) [hereinafter B-286929]; see also OFFICE OF INSPECTOR GEN., DEP’T OF DEF., REPORT
NO. D-2002-109, ACQUISITION: ARMY CLAIMS SERVICE MILITARY INTERDEPARTMENTAL
PURCHASE REQUESTS (2002) (discussing the U.S. Army Claims Service’s (USACS) potential
Anti-Deficiency Act violations related to USACS’s transactions with the General Services
Administration Information Technology Fund).
69. Such general orders (e.g., “provide 100 personal computers”) may not be
sufficiently definite to satisfy the specificity requirements for recording obligations. “An
amount shall be recorded as an obligation . . . only when supported by documentary
evidence of . . . a binding agreement . . . that is . . . executed before the end of the period of
availability . . . for specific goods to be delivered . . . .” 31 U.S.C. § 1501(a)(1)(B) (2005)
(emphasis added). Failure to create a recordable obligation prior to the funds’ expiration
should render those funds unavailable thereafter (once the requirement is better defined).
70. Problems arise because the general requirements found in parked orders often fail
to represent a bona fide need of the ordering agency at the time the order is issued. The
problem arises because, despite the IT fund’s statutory no-year limitation, the ordering
agencies’ appropriations remain subject to their original congressionally mandated periods
of availability. Thus, an ordering agency cannot cite expired funds on its order under
FEDSIM or FEDCAC. See B-286929, supra note 69, where GAO held: “as with other
contractual obligations, once the agency liquidates the obligation, any remaining balances
are not available to enter into a new obligation after the account has expired (i.e., if fiscal
year funds, after the end of the fiscal year).”
71. “The Economy Act applies when more specific statutory authority does not exist.”
FAR, 48 C.F.R. § 17.500(b) (2005); see also In re Interagency Agreement—Administrative
Office of the U.S. Courts, 55 Comp. Gen. 1497 (1976) (finding the Economy Act is not the
only authority permitting interagency agreements, and it controls “[i]n the absence of other
statutory authority”). But, in this case, the Brooks Act provided independent authority for the
procurement of automated data processing (ADP, today known as information technology or
IT) equipment. Id.
72. In Valenzuela Eng’g, Inc., B-277979, Jan. 26, 1998, 98-1 CPD ¶ 51, the GAO
explained that, while Economy Act transactions generally are exempted from the
competition mandates in the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. §
2304(c)(5) (2005), that is true only where the agency receiving the Economy Act order has
complied fully with CICA requirements. See also 10 U.S.C. § 2304(f)(5)(B) (2005);
Dictaphone Corp., B-244691.2, Nov. 25, 1992, 92-2 CPD ¶ 380 at 4-5.
73. Most federal government agencies and operations depend upon annual
appropriations. Normally, agencies are not permitted to “augment” amounts provided by
Congress. To the extent that they generate income or receive funds from the public, the

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permit agencies or governmental organizational units to operate like an
ongoing business. Like a business, however, the survival of revolving fund
instrumentalities depends upon the generation of fees.74 Thus, all too often the
pursuit of fees, rather than any congressionally mandated mission, drives these
purchasing organizations.75
Miscellaneous Receipts Statute requires those funds—typically termed miscellaneous
receipts—to be returned to the general treasury. See 31 U.S.C. § 3302(b) (2005) (requiring
that absent a statutory or regulatory exception, “an official or agent of the Government
receiving money for the Government from any source shall deposit the money in the
Treasury as soon as practicable without any deduction for any charge or claim”). In other
words, the agency cannot use them to fund other activities. By contrast, the revolving fund
concept permits certain agencies to create funds, credit receipts to the fund, and use the
funds without further congressional appropriation. See, e.g., JOHN E. JENSEN, QUICK
REFERENCE TO FEDERAL APPROPRIATIONS LAW 172 (2002). Interestingly, under the Economy
Act, one of the most frequently used interagency vehicles, the ordering agency must pay the
performing agency the actual costs of the goods or services provided. See 31 U.S.C. §
1535(b); Use of Agencies’ Appropriations to Purchase Computer Hardware for Dep’t of
Labor’s Executive Computer Network, B-238024, 70 Comp. Gen. 592 (1991). There is no
such statutory restriction for GWACs; however, OMB guidance requires agencies to charge
actual costs and to “transfer GWAC earnings to the miscellaneous receipts account of the
U.S. Treasury’s General Fund.” GEN. ACCT. OFFICE, GAO-02-734, CONTRACT
MANAGEMENT: INTERAGENCY CONTRACT PROGRAM FEES NEED MORE OVERSIGHT 3 (2002).
74. By analogy, most everywhere I shop these days, sales staff attempt to increase the
vendor’s income by offering me a credit card in the hope that I’ll carry a balance and, over
time, pay favorable interest rates. These retail establishments are not lending institutions per
se, nor is lending their primary purpose. As a business, it makes sense for them to maximize
their profit by entering a complementary line of business (in this case, lending).
75. For a useful anecdote, see Steven L. Schooner, The Future of “Businesslike”
Government: The CBD Asserts Its Rights Against Debtor Federal Agencies, 41 GOV’T
CONTRACTOR ¶ 112 (1999); Andrew M. Sherman, GPO Answers Critics: Commerce
Department Policy to Suspend Publication of Solicitation Notices for Debtor Agencies
Furthers Procurement Process Objectives, 41 GOV’T CONTRACTOR ¶ 167 (1999). The
Government Printing Office (GPO) threatened to bar certain federal purchasing offices from
publishing solicitation notices in the Commerce Business Daily (CBD) because those
agencies had failed to pay their printing fees. (Since that time, the CBD has been replaced by
FedBizOpps.) In so doing, the GPO ignored the mandate that the CBD “is the public
notification media by which U.S. Government agencies identify proposed contract actions
and contract awards.” FAR, 48 C.F.R. § 5.101 (2005). Both the Small Business Act, 15
U.S.C. § 637(e) (2005), and the OFPP Act, 41 U.S.C. § 416, required agencies to publish
notices in the CBD, and an outstanding debt to GPO was never an exception to the
publication requirement; nor did such a debt excuse failure to comply with the publication
and response times mandated in 48 C.F.R. § 5.203.
[T]his comedy of errors raises fundamental questions regarding GPO and Commerce
Department roles in managing the CBD. Publication of the CBD is not a business enterprise;
it is a statutorily-mandated vehicle for dissemination of certain procurement information.
There are numerous examples of more appropriate ventures for entrepreneurial Government
such as the Postal Service, the Patent and Trademark Office, Federal Deposit Insurance
Corporation, or the Defense Commissary Agency, which engage in fee-for-service
transactions. The public interest does not require that citizens refusing to buy stamps be
permitted to send letters. The public interest would require, however, that GSA not
disconnect the Internal Revenue Service’s telephone service in early April if the IRS failed to
liquidate its phone bills promptly . . . .
Intricacies of fiscal law, particularly the shell game of interagency budgetary transfers, need

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In practice, this creates an unfortunate “race to the bottom.” Fee-based
purchasing instrumentalities have no stake in the outcome of contracts that they
award. The PM at the purchasing (or receiving) agency willingly pays a
franchise fee to the servicing agency to avoid the bureaucratic constraints (such
as competition mandates) that slow down the PM’s in-house contracting
officer. In turn, the servicing agency gladly streamlines the purchase.
Moreover, once the contract is awarded, the servicing agency has no interest in
administering, nor does it have sufficient resources to manage, the contract.
Thus, in exchange for a fee, the PM can choose a favored contractor without
competition and enjoy the contractor’s performance unfettered by typical
contract administration.76 The Interior Department Inspector General
explained: “Without the checks and balances provided by effective internal
controls, the ‘risk taking,’ ‘out-of-box’ thinking, and ‘one-stop shopping’
advertised by NBC and encouraged by fee-for-service organizations can result
in inappropriate procurements.”77
The Abu Ghraib experience offers a startling illustration of this
relationship. Because its existence depends upon generating fees, the Interior
Department’s NBC willingly provided the Army with contractor personnel.
Despite receipt of that fee, the NBC apparently did not feel compelled to
scrutinize whether the contracting vehicle was being used for its intended
purpose, whether the scope of the Army’s requirement was too broad, nor how
the contractor personnel would be managed. In short, for a nominal fee, the
NBC permitted the Army to inappropriately use a streamlined, commercial
contracting vehicle to obtain contractor personnel through a closed,
noncompetitive process, after which neither the Army nor Interior procurement
personnel managed the contractors’ performance.
On July 13, 2004, the GSA unveiled its “Get It Right” plan to ensure
proper use of its schedule contracts. This initiative is as well intentioned as it is
overdue. The plan will assess regulatory compliance and “calls for GSA to
proactively supervise the proper use of its contract vehicles. . . .”78 More must
be done. Without aggressive congressional intervention, it is unlikely that
not concern taxpayers. The public—whether contractors hoping to compete for work or those
that rely upon Government missions facilitated by procurements—cannot be held responsible
for interagency cash management issues. Nor should one agency’s revolving fund status
adversely impact another agency’s ability to carry out its mission.

Schooner, supra, at 5.
76. Of the 12 procurements reviewed by the Interior Department IG, 11 were outside
the scope of the work of the GSA schedules used. For a similar scenario, see, e.g., Floro &
Assoc., B-285481.3, B-285481.4, Oct. 25, 2000, 2000 CPD ¶ 172 where the GAO
“conclude[s] that the work delineated under the task order is materially different from the
work contemplated under . . . [the multiple award ID/IQ] contract and therefore exceeds that
contract’s scope.”
77. Interior IG Report, supra note 15, at 3.
78. Press Release, Gen. Serv. Admin., GSA “Get It Right” Plan Will Ensure Proper
Use of GSA Contract Vehicles (July 13, 2004), http://www.gsa.gov/Portal/gsa/ep/content
View.do?P=XI&contentId=16390&contentType=GSA_BASIC (last visited Mar. 26, 2005).

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confidence and credibility can be restored to the existing interagency services
procurement regime. More recently, the Government Accountability Office
took a huge step in the right direction by adding the “management of
interagency contracting” to its High Risk List.79 The GAO accurately noted
both the benefits—improved speed and efficiency—and risks associated with
the current interagency contracting regime:
If not properly managed, a number of factors can make these interagency
contract vehicles high risk . . .: (1) they are attracting rapid growth of taxpayer
dollars; (2) they are being administered and used by some agencies that have
limited expertise with this contracting method; and (3) they contribute to a
much more complex environment in which accountability has not always been
clearly established. Use of these contracts, therefore, demands a higher degree
of business acumen and flexibility on the part of the federal acquisition
workforce than in the past. . . . [T]he challenges associated with these
contracts, recent problems related to their management, and the need to ensure
that the government effectively implements measures to bolster oversight and
control so that it is well positioned to realize the value of these contracts
warrants designation of interagency contracting as a new high-risk area.80

The Fay Report suggests another unanticipated pathology that derives from
the use of an interagency purchasing scheme. Keeping in mind that the Army
used Interior Department and GSA contracting vehicles to obtain contractor
support, the Fay Report expresses concern that because “[s]ome of the
employees at Abu Ghraib were not DoD contractor employees,” they may not
be subject to the Military Extraterritorial Jurisdiction Act,81 which might
permit them to avoid criminal prosecution.82
CONCLUSION: RESPONSIBLE DELEGATION OR ABDICATION OF
RESPONSIBILITY?
The Abu Ghraib experience, while atypical in terms of its brutality and the
public outcry it spawned, is sadly typical of a much broader problem that
pervades public procurement.83 A unique combination of policies spanning
79. GOV’T ACCT. OFFICE, GAO-05-207, HIGH RISK SERIES: AN UPDATE 24-28 (2005),
http://www.gao.gov/new.items/d05207.pdf (last visited Mar. 26, 2005).
80. Id. at 25.
81. 18 U.S.C. §§ 3261-3267 (2005).
82. FAY REPORT, supra note 14, at 50. The Fay Report underscored the word “may,”
suggesting that Fay’s legal advisors conceded that this represents an issue of first
impression.
83. Problems with Economy Act transactions involving the DoD are not new:
DoD activities issued Economy Act orders that increased costs by an estimated $16.9
million, violated the Competition in Contracting Act, delegated inherently Governmental
functions to contractors, procured $40.1 million in . . . resources without a proper delegation
of procurement authority, caused apparent violations of the Walsh-Healey Public Contracts
Act of 1936, obtained unauthorized personal services, inappropriately issued $9.6 million in
project orders, and required . . . employees . . . without security clearances to have access to
classified information . . . .

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more than a decade—the outsourcing initiative, the acquisition workforce
reductions,84 the new public management85 (manifested in the form of
acquisition reform), and the government’s massive post-September 11th surge
in activity—has conspired to place unsustainable pressure upon the
government’s public procurement system.
It is not surprising that a downsized government workforce, facing
increasing demands, can lose sight of the foundations of successful public
procurement regimes—such as reliance upon competition and a commitment to
transparency and integrity86—and embrace whatever means are necessary to
meet its customers’ needs. Thus, the streamlined, highly flexible task or
delivery order contract has become the government manager’s weapon of
choice for surviving the outsourcing crisis. Program managers, faced with
severe personnel shortages, favor these fast and all-too-often invisible contracts
because they permit seemingly unfettered flexibility in use of contractor
employees. In turn, sponsoring agencies, increasingly dependent upon the fees
that these cross-servicing agreements generate, gladly serve as a body shop,
providing personnel to augment skeletal organizations. This co-dependency
accelerates a predictable race to the bottom. However well intentioned the
creation of these streamlined purchasing vehicles, the reliance on interagency
task order service contracts, in practice, has grown to resemble a selfreplicating virus, without checks or controls.
OFFICE OF INSPECTOR GEN., DEP’T OF DEF., REPORT NO. 94-008, DOD PROCUREMENTS
THROUGH THE TENNESSEE VALLEY AUTHORITY TECHNOLOGY BROKERING PROGRAM 1 (1993).
84. The acquisition workforce suffered another setback in the Defense Authorization
Act for Fiscal Year 2005. Section 841 of the Senate version of the bill, as originally passed,
would have limited further reductions in the defense acquisition workforce. See H.R. 4200,
108th Cong. (2004). That protection, however, disappeared in the conference report. See
Conference Report to Accompany H.R. 4200, http://www.house.gov/rules/108_conf_dod
4200.htm (last visited Mar. 26, 2005).
85. The new public management (NPM) or reinvention of government gained
popularity as an alternative to the perceived inefficiencies of government bureaucracies.
CHRISTOPHER POLLITT, THE ESSENTIAL PUBLIC MANAGER 32-33 (2003). The push to
streamline government began in New Zealand, Australia, and the United Kingdom and took
hold in the United States in the 1990s through former Vice-President Al Gore’s National
Performance Review (NPR), which pledged to create a government that “works better and
costs less.” See Donald F. Kettl, The Global Revolution in Public Management: Driving
Themes, Missing Links, 16 J. POL’Y ANALYSIS & MGMT. 446, 446 (1997); see also DAVID
OSBORNE & TED GAEBLER, REINVENTING GOVERNMENT: HOW THE ENTREPRENEURIAL SPIRIT
IS TRANSFORMING THE PUBLIC SECTOR FROM SCHOOLHOUSE TO STATE HOUSE, CITY HALL TO
PENTAGON (1992). With a focus on outcome over process, NPM seeks to cut red tape,
downsize the public sector, increase privatization, encourage contracting out, deregulate
government agencies, and empower (indeed even expect) public employees to steer, not row.
See James Q. Wilson, Can the Bureaucracy Be Deregulated?, in DEREGULATING THE PUBLIC
SERVICE: CAN GOVERNMENT BE IMPROVED? 37, 41 (John J. DiIulio ed., 1994) (citing NAT’L
PERFORMANCE REV., U.S. EXECUTIVE OFFICE OF THE PRESIDENT, FROM RED TAPE TO
RESULTS: CREATING GOVERNMENT THAT WORKS BETTER AND COSTS LESS (1993)).
86. See, e.g., Steven L. Schooner, Desiderata: Objectives for a System of Government
Contract Law, 11 PUB. PROCUREMENT L. REV. 103 (2002).

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In processing the relentless deluge of contract requirements that must be
fulfilled, individual contracting officers lack the time to contemplate that,
through these contracts, the government is delegating the responsibility of
governance to contractors. Sadly, the result is that this wholesale delegation of
governmental authority is marked by haste, rather than caution. As episodic
transgressions become routine, it is not enough for the government to retort
that, typically, the government receives good value for its money. Rather,
Congress, the media, the contractor community, and the public require
sufficient insight into the process to determine whether the government’s
contracting practices are appropriately competitive, effective, efficient, and
fair. Without systemic credibility, even a best-value result cannot sustain a
public procurement regime.87
To stem the tide, Congress must renew the government’s commitment to
the long-standing foundations of successful public procurement regimes.
Congress must insist that the government’s contracting actions take place in the
open, subject to competition, oversight, and review. The government must
invest scarce resources to recruit, train, motivate, and retain talented purchasing
professionals. Similarly, it must either create new, or restore and invigorate its
existing (but badly depleted), oversight organizations, such as the Defense
Contract Management Agency and the Defense Contract Audit Agency.
Congress also must make clear that if sponsoring agencies earn fees for
facilitating other agencies’ contracts, those sponsoring agencies will be held
strictly accountable for the contractual outcomes. In other words, contracting
organizations must obey the law, manage the contracts they award, and ensure
that the government receives value for its money. The alternative is chaos. As
the Abu Ghraib experience demonstrates, when public trust is at stake, that
result is unacceptable.

87. Here, I part company with those, like Steve Kelman, who prefer the
consequentialist view that public managers should be granted more freedom to determine the
means while being held responsible only for meeting certain agreed-upon ends. See Steven
Kelman, Deregulating Federal Procurement: Nothing to Fear but Discretion Itself?, in
DEREGULATING THE PUBLIC SERVICE, supra note 85, at 116. “If you want better
management,” argues David Osborne, “untie the managers’ hands and let them manage.
Hold them accountable for results—not for following silly rules.” David Osborne,
Bureaucracy Unbound, WASH. POST MAG., Oct. 13, 1996, at 8. Some also refer to this
theory as “accountability for performance.” See ROBERT D. BEHN, RETHINKING DEMOCRATIC
ACCOUNTABILITY 9-10 (2001).

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