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No Bid Contracts

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California State University, Dominguez Hills
University of Wisconsin, Parkside
Created: September 26, 2005
Latest Update: September 26, 2005

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takata@uwp.edu

Index of Topics on Site Level Playing Fields and the Meaning of No Bid Contracts

Introduction The primary agenda of those in power is to stay in power. To that end they network with one another and create social and business contacts to administer carefully the process of doing business. To that end there is political patronage such as we saw with Michael Brown of FEMA during the Katrina catastrophe. Such patronage is being reported now: "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." (Paragraph 33 of the backup of article)

These little enclaves of power elites and their subordinates lap up many business opportunities before such opportunities are even known to "ordinary folks" without such connections. That is why investigators and accountants are trying to prevent such "inside" dealing. This is one of the reasons we incorporated the affirmative action programs during the Civil Rights period of trying to offer equal opportunities across the whole spectrum of businesses. Not an easy concept to enforce.

Concepts

  • no bid contract - contract which is given out on the basis of the contracting party's beliefs that this is the best contractor, best price, highest quality work to be had, or because there is a networking connection between the contracting party and the contractor.

  • military-industrial price gouging - scandalous and unethical behavior in which large military contractors charged exorbitant fees for products and services, and padded the costs with products and services either not provided or bestowed on other parties not entitled to such benefits'

    Example: "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." [Emphasis added by jeanne.] (Paragraph 1 of the backup of article.) The $568 million bill raises concerns about "cronyism," while the $89.95 bill raises concerns about the tiny ripoff in which funds are diverted to those who can get their hands on them. Maybe $89.95 isn't much to take without authority and redounds to the benefit of the person who took the steel-toe shoes. If he/she was working on clearing debris, he/she maybe needed them. But I need steel-toe boots for welding, and I buy my own. Sounds like that should have been a part of his/her readiness for work. And these expenses add up quickly. These aren't paper clips, folks.

    cronyism - "partiality to cronies especially as evidenced in the appointment of political hangers-on to office without regard to their qualifications" from Miriam-Webster onl;ine dictionary

    Example: $568 million in contracts for debris removal landed by a Florida company with ties to Mississippi's Republican governor. (Paragraph 1 of the backup of article.)

Discussion Questions

  1. Since we had to move quickly, what's wrong with giving the contracts to someone you know?

    Consider: $568 million in contracts for debris removal landed by a Florida company with ties to Mississippi's Republican governor.. (Paragraph 1 of the backup of article.) "concerns among auditors and government officials about the potential for favoritism or abuse." (Paragraph 3 of the backup of article.) "Bills have come in for deals that apparently were clinched with a handshake, with no documentation to back them up. . . " (Paragraph 6 of the backup of article.)

    Consider that you can't close a deal with a handshake unless you know the person.

  2. What kind of accountability has been attached to these no bid contracts?

    Consider Paragraph 11 of the backup of article: "The investigators are asking how much money AshBritt will collect and, in turn, what it will pay subcontractors performing the work. . ." and Paragraph 12 of the backup of article: "The contracts also show considerable price disparities . . . " And Paragraph 16 of the backup of article:"There is just more of the good-old-boy system, taking care of its political allies," . . . "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."



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