EDITORIAL: Federal contracting is a complete mess

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The federal government spends $37 billion annually buying goods and services from outside contractors, and according to two financial watchdogs of government spending, the system for doing so is broken.

The latest criticism comes from federal procurement ombudsman Alexander Jeglic.

In a report released last week, he said the procurement system has been broken for decades, lacks consistent rules for awarding contracts, has no coherent, government-wide way to identify poor contractors and lacks transparency.

That comes on the heels of a report by federal auditor general Karen Hogan, who said fiascoes such as awarding a $60-million government contract to develop the ArriveCAN app that was supposed to cost $80,000 are widespread, across the government.

In addition to wasting taxpayers’ money, a broken federal contracting system invites fraud where contractors are paid for work they didn’t do.

It also exposes the system to political corruption, where those awarding the contracts are pressured to do so because of patronage, where politicians award contracts not on the basis of who is best to do the job, but as a reward to contractors favourable to the government, regardless of their ability.

Jeglic proposed five ways to address the problem.

• Appointing a chief procurement officer to preside over the contracting process across the federal government.
• Creating a government-wide registry identifying consistently poor contractors.
• Developing one, universally applicable set of procurement rules across the government.
• Using artificial intelligence to streamline the procurement process by eliminating redundant or straightforward tasks.
• Creating a transparent database, keeping track of what the government is buying and how and where it buys it.

By contrast, Hogan recommended no new rules for contracting, saying there are plenty of rules, but the problem is that those in government awarding these contracts often fail to follow them.

We’d add vigorous criminal prosecution where fraud is identified and demoting and firing civil servants who consistently fail to follow contracting rules.

If the template for awarding $37 billion annually to federal contractors for providing services to the government is broken, then the system will continue to be wasteful and inefficient, no matter how much money is being poured into it.

In a time of skyrocketing federal deficits and repeated fiascoes in government spending, nothing will change unless these problems are addressed.