Private/Public Waste

AS it developed over the past decade, the practice of contracting out federal-government responsibilities to private firms was seen as a way to trim bureaucratic waste and inefficiency. As it turns out, the practice has bred its own kinds of waste and fraud.

A White House report, prepared for the Office of Management and Budget, details widespread misuse of public monies by companies hired to carry out such government business as environmental cleanup. Lavish entertainment expenses and unreasonably high salaries are among the abuses listed. The loss to the government is in the billions of dollars. Investigators put much of the blame on the shortage of government auditors to monitor contracts and spot illegal use of funds.

That's part of the problem, but the implication that a larger corps of inspectors general would solve everything is flimsy.

It would take a huge army of auditors to keep an adequate eye on all the contracts signed under current procedures.

Some experts who have studied the problem underscore the extreme complexity of government contracts and the preponderance of experience and know-how on the private-sector side of the dealings. The mountains of paperwork invite deception and fraud, they argue.

The overall solution? Design a system of letting federal contracts that makes it clearer what is expected of a contractor. Spell out how the firm's performance will be assessed, so that unmistakable signals of government watchfulness are given at the beginning of the process. And do a better job of training government employees who negotiate the contracts.

The firms that get government business have a duty to perform the work honestly. Those who take advantage of lax oversight ought to be punished. But, assuming that contracting out will continue to be a significant part of our government operations, the system for awarding such business should be made much less conducive to abuse.