Contractors are a mainstay of the federal government. While private sector contractors played critical and highly visible support roles for the Department of Defense and the Department of State in Iraq and Afghanistan, they also play quieter but still important roles assisting the Department of Education collect student loan repayments, the U.S. Agency for International Development run development programs, the Department of Energy manage its national labs, and the Environmental Protection Agency clean up hazardous waste sites, among numerous other tasks. In fiscal year (FY) 2020 alone, the U.S. government spent about $400 billion on service contracts, and by one estimate, there are roughly three contract employees for every one civil servant employed by the federal government.
Contractors also play an important but largely unexamined role in helping agencies write rules. There are two reasons why it is important to understand what is happening here. First, rules are legally significant, so anything—or anyone—that influences them has impact. Once agencies follow the cumbersome notice-and-comment process the resulting rules carry the same force and effect as laws passed by Congress. Second, rules are politically significant. Rulemaking was central to former President Trump’s political agenda, and it continues its prominent role in President Biden’s administration.
In this report, I examine how contractors contribute to the rulemaking process at federal agencies. The short version of the story is that contractors actively contribute to rulemaking, but there is little understanding of what this means in practice. Put simply, we do not know a lot about which tasks contractors perform for which rules and which agencies. To unpack this, I draw on a narrow slice of procurement data and provide a snapshot of contractor activity in rulemaking, exploring which agencies are most actively engaged in regulatory service contracting and the amounts they have allocated for these activities in recent years. I also look at the firms that provide these services, with an eye toward understanding the types of contractors that do this work and where they are located. Finally, I explain why the reach of these data is so limited and argue that scholars and policymakers should give greater attention to contractors in rulemaking.