Pentagon Contracting 101


Overview

Tracking contracts in the U.S. Department of Defense can be daunting. DOD purchases more than $1 billion of goods and services every day, accounting for two thirds of all government purchases. It is the largest federal agency in the United States, consuming more than half of discretionary spending in the U.S. budget. And it employs some 3 million people globally, more than the world’s largest corporation.

Show me $1 billion


Here’s one way of looking at it: “The height of a stack of one billion one dollar bills measures 358,510 feet or 67.9 miles. This would reach from the earth’s surface into the lower portion of the troposphere – one of the major outer layers of earth’s atmosphere.” (SOURCE: EHD.org)

Because of its size and complexity, DOD contracting practices and scandals frequently set the agenda for contracting (acquisition in bureaucratese) across government. For example, the annual defense authorization bill is the starting point for the majority of the government’s acquisition-related legislation. There’s even a Defense Acquisition University where contract managers are trained to manage increasingly complicated contracts. These are all great sources for stories about federal contracts that can be walked back to the local level.

Size isn’t the only thing that makes Pentagon contracting different from that of other agencies. National security enjoys exalted status when it comes to fiscal discipline. In the words of Ronald Reagan, “defense is not a budget issue: You spend what you spend.” This viewpoint often extends to contracting practices, leading to contracts that end up costing much more than the contract originally specified. Ultimately it can result in inefficient spending and, at worst, profiteering.

The Pentagon. (David Gleason via Flickr)


Because of DOD’s heavy reliance on the private sector for goods and services, the defense industry has a unique degree of influence in government. The defense sector spent $145 million lobbying in 2010 and now employs some 1,000 lobbyists, according to the Center for Responsive Politics. This means a robust trade and business press (Defense News, Aviation Week, National Defense) covers the defense industry closely. Those trade publications are also a good source for journalists covering pentagon contracts.

Read the other sections of this how-to package  for examples of outstanding news stories on defense contracting.