Nearly every administration since Reagan has pledged to reduce the size of the bureaucracy or increase government efficiency, but they have all missed the low hanging fruit: enforcing the laws that proscribe the hiring of contractors to augment the federal workforce. With the Senate facing an upcoming vote on the budget for the federal government, some thoughts may turn to hiring freezes or ways to decrease spending on staff. The reality is that such measures are bound to fall short when agencies run amok with illegal contract hiring.
The civil service’s growth is limited by the budgets enacted by Congress and executed by the president. But many federal agencies do an end run around hiring freezes by hiring contractors instead of federal employees to perform government work. The result? Bureaucracy expands rather than shrinks, congressional oversight is lost, ethical restrictions don’t apply, and government growth continues in defiance of known laws.
Federal law generally prohibits federal agencies from employing contractors to augment the federal workforce. The prohibition on hiring contractors for their specific skills to fill ongoing federal jobs has been law since the 1880s. Without specific authorization from Congress, hiring contractors in this manner is strictly speaking a felony. But many agencies do it nonetheless, as these laws are rarely, if ever enforced.
I am a federal employee at the National Nuclear Security Administration (NNSA), the Department of Energy (DOE) agency responsible for nuclear weapons. Neither NNSA nor DOE has ever had authorization to use support service contractors to augment the federal workforce. In my experience, the laws are followed at DOE generally, but as of January 2017 there are in the NNSA788.8 contractor or full-time equivalent (FTE) contract workers supporting a federal staff capped at 1,650. That’s nearly one for every two federal staffers. While there have been contractors filling gaps in the federal staff for all of my 13 years at NNSA, the growth accelerated sharply in the last administration.
The presence of contractors creates work that justifies more contractors. Despite the cap on the number of federal workers, which has decreased total federal employment at NNSA by more than 200 FTEs in the past five years, there is now a shortage of office space.
The prohibition on hiring contractors was first enacted in 1884, through what later became part of the Anti-Deficiency Act (ADA). The text of the statute reads:
No Department or officer of the United States shall accept voluntary service for the Government or employ personal services in excess of that authorized by law except in the case of sudden emergency involving the loss of human life or the destruction of property
The term “personal services” was widely understood to mean hiring a particular individual for his or her skills — hence nearly all positions in the federal civilian workforce are “personal services.” Subsequent legislation included examples of personal services, such as “civil officer, clerk, draughtsman, copyist, messenger, assistant messenger, mechanic, watchman, laborer or other employee.” By 1905, the prohibition had been expanded to cover the entire federal government. Moreover, specific penalties were provided for knowing and willful violations: suspension or termination, no less than one month in prison, and no less than a $100 fine. In 1950, the penalties were updated to $5,000 and two years in prison.
Leaving the legalities aside, why does the federal government’s reliance on contractors matter? Wouldn’t the same number of people be employed in the bureaucracy either way? Surely the agencies are limited in the funds they can spend on staff.
They are not.
At the NNSA, for example, the majority of the contractors are paid by using “program funds.” The agency in effect skims budgets appropriated and authorized by Congress for other purposes. The NNSA does not cite — and does not have — any general authorization for this practice. This seems to fit the definition of misappropriation.
Both of these actions — hiring contractors to augment the workforce and using misappropriated funds to pay them — violate separate components of the Anti-Deficiency Act. By breaking a couple of old laws, the busy federal bureaucrat can have a ready supply of assistants, who can be hired and fired more or less at will — though mostly they are just hired, as many stay on for decades. This convenience circumvents the civil service act to boot.
Contractors don’t need to go through the lengthy federal hiring process and are not subject to most (if any) of various federal ethics rules, including the Hatch Act and legal limits on lobbying or accepting gifts. What’s more, when a favored fed retires, he or she can simply be re-hired with a contractor company and go right back to work, often at double the take-home pay.
Enforcing these prohibitions should be a win-win-win. The bureaucracy can be sharply cut with no additional legislation required. Agency budgets can be spent as Congress intended, in the other 425 congressional districts around the U.S., rather than being concentrated in the three around D.C. And the remaining feds in the rogue agencies will have to do their own work. The only losers are the Beltway bandits whose business model relies on ignoring the law.
Originally published to RealClear Policy.