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FBI: Contractors Steal $100 Billion+ from the Federal Government
Well that's a lot of money.
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Government contracting in the U.S. is pretty corrupt. I’ve noted that the government pay scale for, say, McKinsey, is $3 million a year for one college graduate to work on a project. But it goes way beyond that. The FBI put together a task force in 2019 to look into bid-rigging in procurement, which is when bidders collude to rig an auction for government contracts.
The amount seems like a problem.
The Procurement Collusion Strike Force—which formed in November 2019—consists of 22 United States Attorneys and seven federal law enforcement agencies, including the FBI. Over the past year, more than 360 investigators, analysts, and data scientists have worked (mostly virtually) across dozens of federal, state, and local agencies to deter and detect crimes involving federal money. The strike force expanded over the past year as word spread that federal investigators were looking anew at the broad scope of the problem. By some estimates, roughly 20% of government procurement spending is lost each year to bid rigging—a significant sum when the budget for discretionary spending on public procurement is more than $580 billion, as it was in 2019.
The amount spent this year is $639 billion on procurement, and there’s no reason to assume the amount of bid-rigging has gone down. One fifth of that is stolen.
That’s… a lot.