The Politics of Contracting
May 1, 2004
POGO has examined the top 20 federal government contractors from Fiscal Year (FY) 2002. Since 1997, the federal government has awarded over one trillion dollars to federal contractors. In FY 2002, the federal government spent over $244 billion on contracts for goods and services on behalf of the American public. Over 40% of the $244 billion was awarded to the top 20 federal government contractors. POGO investigated the top 20 government contractors, examining campaign contributions, lobbying expenditures, and government contract award dollars.
Another way contractors gain influence is to hire away civil servants and political appointees with access to inside people and information from their government positions, often offering higher salaries, bonuses, or other inducements. In some cases, highly-skilled and well-connected former senior government officials, many of whom have worked for the Department of Defense or in Congress, enter the private sector as executives or lobbyists, or on the boards of directors of government contractors - a practice known as the "revolving door."
The revolving door has become such an accepted part of federal contracting in recent years that it is frequently difficult to determine where the government stops and the private sector begins. The practice of senior federal employees going to work for the federal contractors over which they had authority creates six critical problems:
(1) It provides a vehicle for public servants to use their office for personal or private gain at the expense of the American taxpayer;
(2) It creates an opportunity for government officials to be lenient toward or to favor prospective future employers;
(3) It creates an opportunity for government officials to be lenient toward or to favor former private sector employers, which the government official now regulates or oversees;
(4) It sometimes provides the contractor with an unfair advantage over its competitors due to insider knowledge that can be used to the benefit of the contractor, but to the detriment of the public;
(5) It has resulted in a highly complex framework of ethics and conflict of interest regulations. Enforcing these regulations has become a virtual industry within the government, costing significant resources, but rarely, as the record shows, resulting in sanctions or convictions of those accused of violating the rules; and
(6) The appearance of impropriety has two significant negative implications. First, it exacerbates public distrust in government, ultimately resulting in a decline in civic participation. Second, the vast majority of career civil servants do not use their government jobs as stepping stones to high paying jobs with government contractors, and it demoralizes them to see their supervisors and co-workers do so.
The revolving door is a story of money, information, influence, and access - access that ensures that phone calls get through to policymakers and meetings get scheduled. The American taxpayer is left with a system that sometimes compromises the way the government buys goods and services from its contractors.
This appendix includes some of the most egregious, but not illegal, examples of the revolving door. POGO is not accusing any of the persons herein of any illegal actions. Furthermore, POGO is not suggesting that all cases included are unethical. Rather, POGO is illustrating the frequency with which former career government employees or political appointees go to work for federal contractors. Finally, POGO does not claim to have cited all cases of the revolving door.
| Top 20 Federal Government Contractors | HTML Link |
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| 1. Lockheed Martin | HTML | |
| 2. Boeing | HTML | |
| 3. Northrop Grumman (includes TRW) | HTML | |
| 4. Raytheon | HTML | |
| 5. General Dynamics | HTML | |
| 6. University of California | HTML | |
| 7. United Technologies | HTML | |
| 8. Computer Sciences Corporation - CSC | HTML | |
| 9. Bechtel | HTML | |
| 10. Science Applications International Corporation - SAIC | HTML | |
| 11. Carlyle Group | HTML | |
| 12. TRW (merged with Northrop Grumman in 2002) | HTML | |
| 13. AmerisourceBergen | HTML | |
| 14. Honeywell International | HTML | |
| 15. Health Net, Inc. | HTML | |
| 16. British Nuclear Fuels - BNFL | HTML | |
| 17. General Electric | HTML | |
| 18. L-3 Communications | HTML | |
| 19. California Institute of Technology | HTML | |
| 20. BAE Systems | HTML |
POGO's list of the top 20 government contractors for FY 2002 was compiled by Government Executive magazine (Vol. 35, No. 12, August 2003, p. 24). The dollars for total, individual, political action committee, and soft money contributions, as of December 1, 2003, were provided by the Center for Responsive Politics. Lobbying expenditures were compiled by POGO from information obtained from Political Money Line and the Center for Responsive Politics. Contract award dollars from FY 1997 through FY 2002 were compiled by Government Executive magazine. In February 2004, DOD listed its top 100 contractors in FY 2003 and we provided those DOD contract award figures for completeness.
For more information about the revolving door between the government and federal contractors and about campaign contributions and lobbying expenditures, please see POGO's report "The Politics of Contracting." For more detailed information regarding misconduct by the government's top contractors, see POGO's Federal Contractor Misconduct Database and POGO's report Federal Contractor Misconduct: Failures of the Suspension and Debarment System.
Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.
