Combating the Hidden Beltway Swamp Culture

Readers of Chronicles know the importance of culture. The customs, institutions, and social relationships of a country shape every aspect of our lives from the most mundane interchanges to the most abstract mechanisms of justice and social order. Together they form an ecosystem that, ideally, promotes wider social and civic health. Unfortunately, it can also promote dysfunction.

Would you be surprised to learn that there’s a hidden-in-public culture that enables the overweening reach of the deep state and, more broadly, the Beltway swamp ecosystem? Welcome to the federal budget and procurement world. Yawn if this sounds much less interesting than policy debatesthey’re counting on your indifference as they work tirelessly to utilize these systems for their benefit.

Here’s how it works. Congress passes annual budgets for each executive branch agency. Senior executive service bureaucrats and appointed agency officials then spend budgeted funds, mostly through federal procurement processes via contracts and grants. But the devil, is in the details.

Start with the budget. Agency budgets differ not only in amounts but also in the detail with which Congress mandates the purpose of funds. Some agency budgets lack significant detail, leaving the use of the funds to the decisions of the agency leaders. Other agency budgets are extremely detailed—this is especially true of the defense budget. Funds can usually be allocated by agency bureaucrats for various needs consistent with a budget line-item but cannot be earmarked for other ends. For instance, in the Defense Department money allocated for basic research cannot be used for early applied prototyping to validate research findings. Line-item 6.1 in the Defense Department budget cannot be spent for line-item 6.2 purposes.

Sounds good, right? Congress sets priorities via budgeting and the bureaucrats and appointees work the details. But dig a little deeper and consider the behind-the-scenes negotiating and lobbying that result in budget line-item details. Consider how a favored program can end up with its very own line-item, guaranteeing its funding, or how a notionally supported program can be included with others under more general budget language and find its funding diverted to other ends that are favored by the bureaucracy or the administration.

Keep in mind as well that different budget line-items have different time spans within which the funds must be used. Budgets are passed annually but agencies can have three years (common for research and grants), seven years, or even longer to spend the funds. Monies not spent in one year roll over in those cases and don’t appear as part of the following year’s budget, allowing the agencies to significantly shape what is actually funded and how.

Once budgets are passed, agencies fund many of their activities through federal procurements, i.e. contracts or grants to outside groups. The Federal Acquisition Regulations (FARs) and the much more detailed Defense FARs lay out the general processes through which procurement occurs. First, the agency must identify the purpose of the intended program or purchase and align it with the supporting budget item and funds. Then it must draft a Request for Proposals (RFP) and issue it. In most cases the RFP is at least notionally open to bids from a variety of responders. In a few cases there may be a Sole Source procurement in which the recipient is pre-identified but must still respond with a formal proposal.

Proposals are then reviewed against the specified program or purchase requirements and the proposed cost evaluated. Once a bidder is selected, a contract or grant is awarded and a government Contracting Officer is named to formally oversee its execution and government acceptance. For complex contracts (such as many defense procurements end up being) the contracting officer may appoint a contracting officer’s technical representative to track and evaluate progress toward the contract’s successful fulfillment. Often there are interim steps that can yield progress payments along the way.

So far so good. But consider culture, relationships, and norms in this process. Within the budget and acquisition process there are numerous points where the professional relationships between bidders and government employees might influence judgments. This is true regarding back-office lobbying as budgets are drafted and certain programs become protected line-items of their own. It’s also true as agencies begin to draft candidate RFPs and long-time contractors seek to shape the agency’s priorities and the details of the procurement without stepping officially into the formal process. It’s also true when contractors encounter budget overruns or technical difficulties and seek modifications to the agency’s RFP, budget, or schedule.

And things get even more cozy when you take into consideration the role of officially not-for-profit organizations that sometimes advise agencies, via grants or contracts from them, and often include staff who used to work in an agency or a relevant contractor corporation.

Nor is this last issue limited to procurements. The hidden culture goes deeper and wider than that, but seldom steps entirely away from this swampy behavior. James Comey left his role as deputy attorney general in the Department of Justice in 2005, serving first as general counsel and then senior vice president of Lockheed Martin and then as general counsel at Bridgewater Associates, both major federal contractors. In September 2013 he returned as director of the FBI and famously handled, or didn’t handle, the issue of Hillary Clinton’s private server holding classified and other government information.

What does this all mean for cleaning up the swamp? It means that policies and personnel changes alone are not sufficient—we must change the habits, mechanisms, and self-serving relationships that are embedded in the Beltway culture. Any incoming administration must pay special attention not only to these but also to what has been set in motion via previous budgets and procurements. The revolving door between government, contractors, notionally not-for-profit paid advisors, and lobbyists needs significant reform and much more stringent limits.

Expect the Beltway denizens to fight this fiercely, including through changes in contract wording, enforcement, and staffing. We should realize that strategic air strikes, will not win the war. It will be a ground combat operation as well. Plan and staff accordingly with the intent to reform the hidden culture itself. Only then will we right the national ship.

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