The Constitution vested different contracting powers to the government agencies and the State and National governments. This paper will discuss how the separation of powers and federalism have complicated contract design and oversight.
Article I offer legislative powers and limitations for congress and the States in financial matters. Article II gives the President powers to check on those powers such as by veto. Therefore, these require contractors to know the specific powers of each body when dealing with government contracts. The Constitution also bars states from contracting with foreign Nations and other States without Congressional approval. This complicates contracting among states, especially in modern times, where global trading has been eased by technology and where the states are constantly competing against each other. The Tenth Amendment vested policy powers among the states. Such has forced the federal government to offer conditional grants and funds to the states to achieve various programs using local non-profit organizations.
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Different economic and political climates force governments into different contracts and adopt various contracting approaches such as negotiated procurement and cost-plus-fixed-fee contracts. During the early and war years, the high demand for military contracts made the government favor cost-plus contracts leading to loss of funds to fraudulent contractors and corrupt officials. Such created the need for all purchases to go through the Purveyor of Public Supplies and all contracts to be registered with the Department of Treasury. This role was later given to the US General Accounting Office, while congress has created over four thousand statutes that govern government contacts (Cooper, 2003). The use of contracts for covert operations by various government bodies also has limited courts from looking into these contracts. The doctrine of laissez-faire and strict interpretation of the limitation of interstate commercial transactions made courts restrict oversight regulations by the federal and state governments (Giocoli, 2015). Therefore, such changes influence government contracts' approach by different governments and government bodies differently and thus complicate contract design and oversight.
References
Cooper, P. J. (2003). Governing by contract: Challenges and opportunities for public managers . CQ Press.
Giocoli, N. (2014). Classical competition and freedom of contract in American laissez faire constitutionalism. SSRN Electronic Journal . https://doi.org/10.2139/ssrn.2448419
