Defense measure could steer billions toward contractors

Analysis finds that much of the work would go to large contractors.

Federal contractors could reap billions from earmarks in the fiscal 2009 Defense authorization bill, according to a Government Executive analysis of data provided by a nonprofit group.

The House version of the bill includes nearly $10 billion in earmarks, the analysis of data from Taxpayers for Common Sense, a budget watchdog group in Washington, showed. Almost $8 billion of that would be directed to contractors. The Senate's version includes more than $5.4 billion in earmarks, and $2.2 billion would go to contractors.

The bill has passed the House but still must clear the Senate and go through conference negotiations. The money also must be appropriated in spending bills before contractors would see any of it.

The recipients of the earmarks would not have to compete with rival firms for the work. "These earmarks short-circuit the entire acquisition process," said Steve Ellis, vice president for programs at Taxpayers for Common Sense. "If they want these projects, they should go through the existing system."

Much of work set aside as part of the Defense bill would go to large, successful contractors, the data indicated.

Nearly $7.3 billion in House earmarks and more than $1.8 billion from the Senate would go to companies that were among the Top 200 Federal Contractors for fiscal 2006. Lockheed Martin Corp., which topped the list with $33.5 billion in fiscal 2006 contracts, is among the companies with the most to gain from the projects. The goliath federal workhorse, whose government work ranges from building fighter planes to handling human resources operations, would receive a portion of at least five projects that are valued at a total of more than $1 billion.

Altogether, nine of the top 10 contractors from fiscal 2006 would benefit from the Defense authorization bill. The only one left out is KBR Inc., the former Halliburton subsidiary and the largest contract holder in Iraq.

"Until relatively recently, the conventional wisdom was that earmarks were needed for the little guys to break into the system and get their foot in the door," Ellis said. "But the big guys are still the dominant animal in the earmark game, just like they are in the contractor game."

Lawmakers have defended their earmark requests as an appropriate and necessary use of federal dollars.

They note that President Bush's budget frequently does not include items that had been requested by the Defense Department and that the Pentagon views as necessary for national security or for domestic economic growth. Many of these projects, they say, already have been competitively bid, with the earmarks serving only as an extension.

The C-17 Globemaster aircraft is one such project. A Dec. 19, 2007, letter to Defense Secretary Robert Gates signed by 57 members of the House outlines potential consequences of cutting the project's funding stream.

"Failure to fund the C-17 will mean the loss of over 30,000 jobs in the U.S., loss of the nation's large military airplane industrial base and will result in our loss of leadership in this area to Europe," the letter stated. "Reopening the C-17 production line, if the DoD discovers it needs C-17s in the future, will cost billions and take years."

Eleven members of the House set aside $3.9 billion - the largest earmark in the authorization bill - for Boeing and Pratt & Whitney to work on the project.

But earmarks continue to attract criticism that they line the pockets of politically connected companies in lawmakers' home districts.

"This is a way to circumvent the competitive award process," said David Williams, vice president of policy at Citizens Against Government Waste, an anti-earmark watchdog group. Members of Congress, he said, are "taking care of companies that are in their district."

Taxpayers for Common Sense found that 60 percent of lawmakers who serve on the House Armed Services Committee received contributions from companies that also received earmarks in the Defense bill. The group did not complete a similar analysis on the Senate side.

Although most observers agree that most of the earmark requests likely will survive a House-Senate conference committee, the fate of the authorization bill remains in question. None of the annual spending or authorization bills are close to reaching the president's desk for signature, and Democratic leaders have discussed the possibility of passing a continuing resolution until a new administration is in place next year.

House and Senate leaders announced last week that they expect to pass the Defense bills before the fiscal year ends on Sept. 30, but neither chamber has begun marking up the Defense appropriations bill, which would fund all earmark requests.

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