A Sea Change in Government Contracting?

My Washington Post colleague Dana Hedgpeth notes a potentially important sea change in government contracting. It could be a sign of what some analysts call the "softer side" of the federal government's spending, she writes.

Last week, SAIC of McLean won a $61 million contract with the National Institutes of Health and the Department of Health and Human Services to provide a software system that helps monitor grants.

The deal, some analysts say, represents what they predict will be a shift in the government's spending pattern. After years of the Pentagon awarding multi-million-dollar contracts to companies to build tanks, planes and armored vehicles to help support the wars in Iraq and Afghanistan, some company executives and defense industry analysts are predicting that the boom for major weapons systems may be over.

These experts say that the government will probably cut back defense spending and start putting more money toward agencies that do "softer" work -- like NIH and the Food & Drug Administration.

By Eric Pianin |  November 10, 2008; 7:12 PM ET
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A good thing!

Posted by: bmgold1 | November 11, 2008 11:58 AM

u need to get out more, mr. pianin. SAIC doesn't make any of the defense hardware that you list. it has always been a services firm, so you have picked the wrong example for, yes, a real trend that industry and even the so-called trade press have noted for about a year. if you care to look at the budget prognostication medians, defense spending growth will be flat. we still have a couple of wars, you will notice. expect most non dod agencies to be squeezed badly. NIH has enjoyed tremendous contract growth, in line or exceeding DoD increases in the past years. it is more like the pentagon than civilian agencies. if you want a good story, which your colleagues ignore, dig in the fertile ground of the organizational and personal conflicts of interest among NIH grantees at med schools and elsewhere, as well as the consulting income of government employees at NIH. there is lots there, even if you picked the wrong example. good luck.

Posted by: axolotl | November 12, 2008 10:09 AM

SAIC annually receives more than $6 billion in government contracts. Besides the obvious DoD stuff, they have received more millions in HAVA contracts and FEC stuff involved in proprietary software and hardware allegedly used in vote rigging (see, thelandesreport.com, e.g.). So now private spook corps will have access to where the money goes, and who is getting it. Defensive as in, Mr. Fox won't tell where all missing chickens went? When it comes to the essence of the democratic process and national health matters, this needs to be done in-house with government employees and the maximum amount of transparancy and oversight, not outsourced to the shadow group controlling national defense. Ditto for Halliburton, KBR, etc. Ten billion dollars a month of essentially borrowed taxpayer dollars should be treated with a lot more respect. Even a little respect would be an improvement.

Posted by: jcoffey99 | November 12, 2008 12:38 PM

Mr. Coffey (!) -- do you really trust govt employees more than contractors (I would say: trust neither more than the other)? look at all of procurement fraud cases involving government people, look at federal productivity, leaks, file snooping (IRS), and the aversion to pay for performance. it would be foolish to believe feds are any more above reproach than the average contractor (and they are certainly ultra secure), and over time, it is the same demographic and gene pool. if you want it not yesterday, but rather, uh, maybe next week (and no commitments), and maybe a little raggedy and expensively, go for the fed employee solution. u betcha.

Posted by: axolotl | November 12, 2008 2:03 PM

"After years of the Pentagon awarding multi-million-dollar contracts to companies to build tanks, planes and armored vehicles to help support the wars in Iraq and Afghanistan ..."

Actually, those specific weapons platforms aren't of much use in Iraq or Afghanistan.

More importantly, buying tanks and armored vehicles is really a smaller fraction of the DoD budget than you might imagine.

After personnel costs, the single largest item, if you want to find large sums of money that buy us zero benefit, look at nuclear weapons programs and missile defense. Next, ask about carrier groups and expeditionary air forces.

If we had a national defense establishment focused on defense, rather than offense, we would have a much smaller military. And a lot fewer "defense" contractors.

Posted by: BrianX9 | November 13, 2008 12:11 PM

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