Everyone knows that the federal government wastes billions of dollars every year; the stories of the Pentagon’s $500 hammers and $600 toilet seats are now legend. But in reality, it’s even worse than that. The massive waste in Washington isn’t the result of incompetent bureaucrats making bad decisions, but rather following the rules!
Federal contracting rules are so complicated that they only reward the people who know how to play the game. People who are experts at lobbying and regulations win, not those who are experts at actually doing the job. Consider Healthcare.org, which arrived DOA, suffering from dozens of failures. That wasn’t some unusual situation—94% of large federal information technology projects from 2003 to 2012 were unsuccessful. Over 40% failed completely.
The “use it or lose it” policy of dozens of agencies and departments leads agencies to go on a spending spree to use up every last dollar budgeted them in the previous year. For if they don’t, that money is gone forever and “underspending” could affect their appropriation the following year. This system creates a perverse incentive leading the Department of Veterans Affairs to buy $562,000 worth of artwork in a single week and the Department of Agriculture to purchase $144,000 worth of toner cartridges in a single day!