Government by Contract and the Structural Constitution

Although private parties have performed government functions throughout most of Western history, mainstream administrative law scholarship is dotted with concerns over the extent to which modern federal government activities are outsourced to private contractors. Federal contractors routinely exercise authority that is classically "executive" in nature. They write regulations, interpret laws, administer foreign aid, manage nuclear weapons sites and intelligence operations, interrogate detainees, control borders, design surveillance systems, and provide military support in combat zones. Administrative law places few constraints on private contractors, and prevailing constitutional principles--the state action and private delegation doctrines, in particular--are either inept at holding private contractors to constitutional norms or utterly moribund. A common theme that appears in the vast literature on privatization, therefore, is accountability. There is no recognized constitutional theory that meaningfully prohibits Congress or the President from transferring significant amounts of discretionary governmental power to wholly private entities that operate beyond the purview of the Constitution, and there is relatively sparse scholarly analysis of the subject. This Article searches for a constitutional principle that could be employed to address hypothetical outsourcing arrangements that go too far for the American appetite. In that pursuit, it looks to the law governing independent agencies as a natural starting point for evaluating the propriety of outsourcing relationships from the standpoint of the structural Constitution. It then introduces two ideas with an eye toward sparking fresh thinking about the constitutionality of privatization: first, the notion that all actors exercising federal government power should be viewed along a constitutional continuum and not as occupying separate private/public spheres; and, second, that a democratic accountability principle may be derived from the Supreme Court's recent decision in Free Enterprise Fund v. Public Co. Accounting Oversight Board, as a constitutional hook for addressing government-by-contract gone awry. INTRODUCTION I. THE CONSTITUTIONAL DISCONNECT A. Private Contractors: The Problem B. The Shortcomings of Current Constitutional Doctrine II. BRIDGING THE DEVINE A. An Overlooked Constitutional Continuum B. Outsourcing and the Constitutional Text III. GOVERNMENT BY CONTRACT, INDEPENDENT AGENCIES, AND DEMOCRATIC ACCOUNTABILITY A. Independent Agencies and Private Contractors: A Comparison B. Free Enterprise Fund v. Public Co. Accounting Oversight Board C. Accountability and the Constitutional Continuum CONCLUSION INTRODUCTION "If the founding fathers were to return to observe the organizational landscape of the [modern] national government ... they would undoubtedly conclude that their constitutional design had been scuttled entirely.... [S]urely a revolution must have occurred." (1) Of course, in the most common sense of the term, no American revolution--no overt unwinding of the tripartite political regime created by the United States Constitution--has succeeded in the history of our constitutional government. (2) No President or Congress has been overthrown by a popular movement. No segment of the historical American populace has fallen subject to an extraconstitutional form of national government. The constitutional provisions establishing the core levers of power--Articles I through III--survive in virtually identical form to those that were ratified in 1789. (3) Yet scholars have expounded on a "drive to shear the federal government of power" (4) that might qualify as a revolution of sorts. Over the last century, the American populace and its national political institutions have come to tolerate a steady transfer of important government functions from the Congress, the President, and his cabinet, (5) to a vast hodge-podge of quasi-governmental and private actors that evade the oversight mechanisms that bind the political branches of government. …