The latest issue of Mother Jones covers the troublesome issue of the outsourcing of intelligence. Since 2001, America's intelligence community has increasingly turned to private contractors to fulfill duties once performed by in-house government employees. According to William D. Golden, a former Army intelligence officer and an employee at IntelligenceCareers.com, “The government has become addicted to the use of private industry in the world of intelligence.”
Experts say at least 50% of the approximately $40 billion spent on intelligence by the US goes to private contractors. And these aren't just support operations, but central functions being handled by contractors--for example, intelligence analysts and interrogators (such as the ones with CACI International and Titan Corp who were implicated in the Abu Ghraib torture scandal).
Oversight is nearly impossible. Intelligence budgets (even the total top-line budget numbers) are kept secret. Bidding is secret. Activities are secret.
Since the jobs at contractors require "Secret" or "Top Secret" clearances which you must get through a government job, calling the situation a revolving door may be an understatement. As the article says:
Today, the ties between intelligence agencies and the private sector are so close, it’s sometimes hard to tell the difference. Joan Dempsey, a former CIA deputy director, recently -- and approvingly -- referred to consulting firm Booz Allen as “the shadow intelligence community.” Three of Booz Allen’s current and former vice presidents previously served as intelligence agency directors, including James Woolsey, who headed the CIA during the Clinton administration. Connections with the private sector are especially close at the NSA, where outsourcing has grown rapidly. Former NSA director William Studeman is now a vice president of Northrop Grumman, and Barbara McNamara, a former deputy director, is on the board of CACI. After leaving government, these officials keep their high-level security clearances, which makes them extremely valuable to their new employers. “You can’t do anybusiness without having the clearances,” says John Pike of GlobalSecurity.org, a Virginia- based think tank. “How else would you know about the contracts?”
The lines separating contractors from agencies are so blurred that at the leading trade association -- the Security Affairs Support Association (SASA) -- 8 of 20 board members are current government officials.