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The pitfalls of running government as a business

WASHINGTON —Free nights at the Ritz-Carlton, wine-braised short ribs, take-home swag — you could imagine all this being par for the course for an annual bash at Google, Exxon Mobil or another major corporation. When General Services Administration employees enjoyed such perks on the taxpayer's dime, however, it became a huge scandal.

But it shouldn't come as a surprise that some government employees have embraced the freewheeling ways of the private sector. The business of government has become big business, as Washington has moved from providing direct services to the public to doling out private contracts.

It's a transformation that's happened over many decades — one intended to streamline the government by limiting the size of the federal workforce, boosting private industry's role and introducing innovations from the private sector. But in certain pockets of the federal government, the push for private sector efficiency has been eclipsed by a gross imitation of private sector excess.

This month, top officials at the GSA resigned after a regional office spent more than $800,000 on a single conference in Las Vegas — an event that included the services of a mind reader and a clown. The irony of the scandal is that it came from an agency whose very purpose centers on handing out government contracts. In the process of giving out the government's money, some GSA employees didn't think twice about spending it on themselves.

The size of the executive branch has remained close to 2 million workers since the end of the Vietnam War, with a low of about 1.78 million in 2000 and a high of 2.25 million in 1985, according to the Office of Personnel Management. But during that same period, "the federal budget has exploded, and things we deliver has expanded exponentially," says Paul Light, a professor at New York University who has written a book on the subject.

Rather than hiring more workers or using existing ones to carry out new federal activities directly — the way the government used to produce dentures for veterans, as Light recalls — Uncle Sam has instead doled out the money through the private sector.

This has created not only a proliferation of government contractors — private sector employees who sometimes work side by side with federal workers — but also government contracts to arrange for all that spending. Amid this transformation, the GSA has become one of the government's most important middlemen: It's responsible for helping other agencies buy the goods and services they need, overseeing $66 billion in annual federal spending and government property worth $500 billion.

The GSA essentially sits on a big pile of government money that private companies bid for, putting the unassuming Bartlebys of the world in constant contact with its Gordon Gekkos. Rather than emulating the private sector's virtues, some officials at the agency ultimately adopted some of its vices, prioritizing quid pro quo relationships and equating lavish expense with power. Combined with the GSA's diffuse power structure — there are 11 largely autonomous regional offices — and history of mismanagement, it became the set-up for disaster.

Even the agency's attempts to clean up its image have backfired: The GSA chief who just stepped down, Martha N. Johnson, was under fire by Sen. Claire McCaskill, D-Mo., last year for blowing hundreds of thousands of dollars on a privately contracted PR campaign.

This time, the GSA wasn't doling out contracts for another agency but for itself. As in previous scandals, it landed in trouble not simply for spending so much on the conference; according to its inspector general, GSA officials also blithely ignored the government's contracting rules, gave free rooms to contracted employees and helped one contractor hired for the conference spend the agency's maximum, $75,000, for a single day's training.

The larger concern for government reformers is how all of this wheeling and dealing may be diminishing the sense of purpose in some agencies. The real aim of contracting services is ultimately neither to make money nor to spend it, but to achieve a greater good. "It's watering down the culture of public service," says Light, the NYU professor.

Legislators have vowed to get to the root of the problem. But Light worries that the over-the-top aspects of the latest GSA scandal could overshadow the congressional proceedings.

"We never fixed the core problems before because they're boring," Light says. "It's much more fun to haul in the clown in front of the Homeland Security and Government Affairs Committee and ask, 'So, what did you do for your $8,000?' "

Suzy Khimm covers economic policy for the Washington Post. © 2012 Washington Post

The pitfalls of running government as a business 04/18/12 [Last modified: Wednesday, April 18, 2012 6:31pm]

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