by David Phinney
Friday July 12th 2024



War Costs: Who’s Counting?

Defense Contracting in Iraq: The non-partisan Congressional Research Service gives the lowdown on contracting in Iraq as we know it today.

“The Department of Defense is the largest agency in the federal government. It obligated nearly $270 billion on contracts for goods and services in FY2005 — an 88 percent increase over the amount obligated in the year 2000.”

One big problem: There aren’t enough government contracting professionals to oversee the explosion in Defense spending. While the size, shape, and complexity of service contracts have grown with the technical requirements, there is now an imbalance in those to watch them. In some cases the government has sought to hire contractors to do the job that federal employees used to perform.

“There can’t be well-managed contracts without people to manage them,” note two high-level government contracting officials, Allan Burman and Steven Kelman (They are a bit late in that observation compared to others. In fact, Kelman was a big champion of “acquisition reform,” which led to the downsizing of the government’s contracting personnel in the 1990s.) “The current situation creates a vicious circle: Overstretched people make mistakes, producing demands for more rules, creating additional burdens, giving people even less time to plan effective procurements and manage performance.

The full CRS report can be found at the Federation of American Scientists, which regularly keeps tabs on these usually confidential briefing papers for Congress.
MEANWHILE: The Associated Press offers a ballpark figure on the cost of war. Apparently, it’s “relatively affordable.” Iraq eats up less than 1percent of the nation’s gross domestic product, compared with as much as 14 percent for Vietnam and 9 percent for Korea, reports AP’s Matt Crenson. But unlike those previous wars, this one is being paid for with debt — not taxpayer sacrifice.
An Aside: A recent study by Linda Bilmes of Harvard University’s Kennedy School of Government put the total cost of providing medical care and disability benefits to veterans of Iraq and Afghanistan at $350 billion to $700 billion. Together with Columbia University economist and Nobel laureate Joseph Stiglitz, Bilmes estimates that the real price of the Iraq war, when you add up spending to date, future costs and economic impacts such as elevated oil prices, is well over $2 trillion.


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