Monday, September 26, 2005

Many Contracts for Storm Work Raise Questions

Gee....ya think?

Since the Times only allows free access on the day of publication, I'm going to heavily excerpt here, but this is the most telling portion of the article:
The contracts also show considerable price disparities: travel trailers costing $15,000 to $23,000, housing inspection services that documents suggest could cost $15 to $81 per home, and ferries and ships being used for temporary housing that cost $13 million to $70 million for six months.

It seems that there are serious and significant questions to be asked here, particularly how the same company (often, a division of Halliburton) can have such widely fluctuating price structures compared to other contractors doing the same work in essentially the same area.

Remember, these were "no-bid" contracts...and to boot, the US government guaranteed a profit ("cost-plus pricing").

Topping the federal government's list of costs related to Hurricane Katrina is the $568 million in contracts for debris removal landed by a Florida company with ties to Mississippi's Republican governor. Near the bottom is an $89.95 bill for a pair of brown steel-toe shoes bought by an Environmental Protection Agency worker in Baton Rouge, La.

The first detailed tally of commitments from federal agencies since Hurricane Katrina hit the Gulf Coast four weeks ago shows that more than 15 contracts exceed $100 million, including 5 of $500 million or more. Most of those were for clearing away the trees, homes and cars strewn across the region; purchasing trailers and mobile homes; or providing trucks, ships, buses and planes.

More than 80 percent of the $1.5 billion in contracts signed by the Federal Emergency Management Agency alone were awarded without bidding or with limited competition, government records show, provoking concerns among auditors and government officials about the potential for favoritism or abuse.

Already, questions have been raised about the political connections of two major contractors - the Shaw Group and Kellogg, Brown & Root, a subsidiary of Halliburton - that have been represented by the lobbyist Joe M. Allbaugh, President Bush's former campaign manager and a former leader of FEMA.

"When you do something like this, you do increase the vulnerability for fraud, plain waste, abuse and mismanagement," said Richard L. Skinner, the inspector general for the Department of Homeland Security, who said 60 members of his staff were examining Hurricane Katrina contracts. "We are very apprehensive about what we are seeing."

Bills have come in for deals that apparently were clinched with a handshake, with no documentation to back them up, said Mr. Skinner, who declined to provide details.

"Most, if not all, of these people down there were trying to do the right thing," he said. "They were under a lot of pressure and they took a lot of shortcuts that may have resulted in a lot of waste."

Note the political connection. I'm sure the right wing blogovoid would be up in a dander if any of these had Blanco or Nagin attached to them. To continue:
An examination of the contracts granted to date and interviews with state and federal officials raised concerns about some of the awards.

Some industry and government officials questioned the costs of the debris-removal contracts, saying the Army Corps of Engineers had allowed a rate that was too high. And Congressional investigators are looking into the $568 million awarded to AshBritt, a Pompano Beach, Fla., company that was a client of the former lobbying firm of Gov. Haley Barbour of Mississippi.

The investigators are asking how much money AshBritt will collect and, in turn, what it will pay subcontractors performing the work, said a House investigator who did not want her name used because she was not authorized to speak publicly about the matter.

More incestuous dealings. But I digress.
For some smaller companies, the recovery work will be an extraordinary test. For example, Aduddell Roofing and Sheet Metal, an Oklahoma City business run by a former steer wrestler, shares with a partner a $60 million contract to install temporary roofing on houses in Mississippi. Aduddell's single biggest contract before this was for $5 million, company executives said.

Some businesses awarded large contracts have long records of performing similar work, but they also have had some problems. CH2M Hill and the Fluor Corporation, two global engineering companies awarded a total of $250 million in contracts, were previously cited by regulators for safety violations at a weapons plant cleanup.

The Bechtel Corporation, awarded a contract that could be worth $100 million, is under scrutiny for its oversight of the "Big Dig" construction project in Boston. And Kellogg, Brown & Root, which was given $60 million in contracts, was rebuked by federal auditors for unsubstantiated billing from the Iraq reconstruction and criticized for bills like $100-per-bag laundry service. All of the companies have publicly defended their performance.

Representative Bennie Thompson of Mississippi, the ranking Democrat on the House Homeland Security Committee, complained that FEMA and other federal agencies were delivering too much of the work to giant corporations with political connections, instead of local companies or minority-owned businesses.

"There is just more of the good-old-boy system, taking care of its political allies," Mr. Thompson said. "FEMA and the others have put out these contracts in such a haphazard manner, I don't know how they can come up with anything that is accountable to the taxpayers."

As of last week, the federal government was spending more than $263 million a day on the recovery effort.
In other words, about what it spends EACH YEAR in Iraq.
To provide some safeguards, federal agencies can hold an open competition in advance for products routinely needed in emergencies. Such agreements are known as "indefinite delivery, indefinite quantity," or I.D.I.Q. contracts.

The Defense Department relied on that type of contract in assigning Kellogg, Brown & Root to perform more than $45 million in repairs to levees in New Orleans and military facilities in the gulf region.

Records show, however, that FEMA did not use this approach for the blue sheeting used to cover holes in roofs, a standard item in the disaster tool kit. Instead, the agency bought $6.6 million of the material from All American Poly of Piscataway, N.J., on Sept. 13, without full competitive bidding.

Before signing contracts with mobile-home and travel-trailer makers worth in excess of $1 billion, FEMA said it did solicit bids. But the awards were made without the standard open competition required for government contracts.

Mr. Rothwell, of the Homeland Security Department, said FEMA needed to expand its number of I.D.I.Q. agreements so that when disasters struck it could bring in contractors more quickly and at a competitive price.

The two most expensive services the government has signed contracts for so far are manufactured housing and debris removal, which alone have totaled $2 billion, according to contracting records.

The debris contracts have attracted the scrutiny of investigators from the House Homeland Security Committee, in part because of the price agreed to by the Army Corps of Engineers.

AshBritt, which has won the biggest share of those contracts, is being paid about $15 per cubic yard to collect and process debris, federal officials said. It is also being reimbursed for costs if it has to dispose of material in landfills.

But three communities in Mississippi, which found their own contractors rather than accept the terms offered by AshBritt, have negotiated contracts of $10.64 a cubic yard to $18.25 a cubic yard, including collection, processing and disposal.

There you have cronyism in action, providing more cronies with profit while other cronies continue to peck at the carcasses of the dead and diseased.

Sad, huh?