The Billiken's Bluff

One week ago I wrote:

$200 billion seems completely wrong. [Katrina Reconstruction] can be done cheaper. The government is completely inefficient. Run the rebuilding effort more like a business and less like a bureaucracy.

Saint Nick responded:

i don't think that over spending in this case is necessarily a detriment, so long as it's done in an honest manner beneficial only to the refugees, or internally displaced citizens as i've heard them officially referred to as, and not to bush's damaged political standing.

I, in turn, commented:

How much of that $500 million naval reconstruction contract to KBR is necessary? How much of it is the vig (as they say in gambling or construction). I can't say for sure, but I would imagine some of it is, based on KBR/Haliburton's unsavory history in dealing with the US Government in Iraq Reconstruction.

A well-run business wouldn't allow itself to be grossly over-charged like the government was overcharged by KBR in Iraq.

If the US government was a business and did allow this to happen they would soon be OUT of BUSINESS.

Today the NY Times, in typical MSM belated fashion, explored the same topic:

*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.

*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 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.

*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.

*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.
And other experts have questioned AshBritt's fees. "Let me put it to you this way: If $15 was my best price, I would rebid it," said Mike Carroll, a municipal official in Orlando, Fla., with experience in hurricane cleanup. AshBritt has cleaned up debris for FEMA and other government agencies after other hurricanes. Besides possessing a huge roster of subcontractors and the logistics expertise to route hundreds of trucks, the company is also politically well connected. According to Senate filings, AshBritt paid about $40,000 in the first half of 2005 to Barbour Griffith & Rogers, the Washington lobbying firm co-founded by Governor Barbour of Mississippi, who is also a former chairman of the Republican National Committee.

AshBritt officials declined to comment on the Hurricane Katrina contracts.

The US Government is a very poorly run (and seemingly very corrupt) organization.