The vulture need not bid, nor — apparently — pay minimum wage:
Already (in the wake of Katrina), no-bid contracts have been awarded to major Republican contributors including Kellogg, Brown & Root, the subsidiary of Vice President Dick Cheney's old company Halliburton. President Bush has unilaterally lifted a protection law that makes it possible for contractors to pay sub-minimum wage rates to reconstruction workers.
Yes, I've heard the argument: Dick Cheney does not receive compensation from Halliburton, etc. First of all, given the complex deferment arrangements Dick has with his old pals, nobody can say this with any certainty: if Halliburton does well, at this time, does that really have no effect upon Dick's income in the future? Let's take the VP's word that it does not (although why we would want to take his word for anything, given the Enron disgrace, is beyond me) — then this is still rank cronyism of the most repulsive variety. Bush, remember, didn't make money from Michael Brown's appointment to the head of FEMA, but it was astonishingly sleazy nevertheless, and the consequences were very very ugly. If Dick makes nothing — not a penny — from Halliburton's predations in Iraq and Louisiana, then that hardly makes the practice anything but despicable: folks, he is procuring no-bid contracts for his friends.
And yes, I've heard the second argument: Halliburton is the only company with the resources to handle this sort of vast project. Now, by all accounts, this is a crock (and it assumes, to begin with, that Halliburton is both competent and honest — difficult premises to endorse in the wake of their egregious behavior in Iraq), but let's take the argument seriously for a moment. Perhaps they are sui generis in their ability do work on this scale. Here's how you find out: you allow bids from other companies, then assess those companies — in an objective, bipartisan fashion — to determine whether they are up to the task. Pretty easy. And kind of, well, conservative — given their free-market posturing, you'd think Republicans would be in favor of that most basic mechanism: competition.
This Halliburnt-Earth Campaign is nothing short of Stalinist central planning in free-market drag: it assumes that the government, and its favorite corporation, are best able to make decisions regarding the efficient allocation of resources. Any principled economist (and there are at least three, I'm told) should be screaming.
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(If this made your blood boil, please visit Dysblog, where it only gets worse.)
Ed/Pub:NB
Article comments
— go to most recent comments1 - Michael J. West
It might have helped to mention that Halliburton has received reconstruction contracts for Hurricane Katrina--or people might reasonably think you're referring to Iraq.
Besides, after all the fuss about the Iraq contracts, the fact that the administration has done it again for Katrina is all the more appalling.
2 - Douglas Anthony Cooper
Thanks Michael -- clarification added.
3 - marc
OK I'll play your game.
Three names have come forward -- Shaw, Halliburton, and Bechtel as those that could handle the Gulf Coast reconstruction.
And all three are being raked over the coals for their political ties.
Halliburton is having its ties to Cheney brought up yet again (See above), along with its less-than-stellar performance in Iraq. Shaw has some incredibly tight -- one might say incestuous -- connections with the Louisiana Democratic Party. In fact, their CEO also serves as the party's state chairman. And Bechtel is the prime contractor for Boston's disastrous, problem-riddled, out-of-control Big Dig (Can you say John Kerry?)
According to Hoover's Online, there are only 16 construction companies that have over $10 billion in sales a year. (I chose that number arbitrarily, but it seems to be a reasonable choice.) As a non-subscriber, I can only view the top ten. Let's look at them alphabetically (the way Hoover's presents them):
Bechtel: Already eliminated.
Centex: They specialize in private homes. Limited commercial experience, and (as far as I can tell) nothing even close to this scale.
Deere & Company: The John Deere people. They provide the equipment, not the know-how.
D. R. Horton: Again, homebuilders. Also, they have no locations in Mississippi or New Orleans.
Duke Energy: They build power plants. Certainly useful, but not quite what we need.
Emerson Electric Company: Electrical equipment manufacturers.
FirstEnergy: Another utility.
Georgia-Pacific: Paper and wood products.
Halliburton: We've disqualified them, too.
International Paper Company: Another paper and wood products company.
So take your pick guy just who would be acceptable even if there was a bidding process?
Schlumberger you say? Theri French owned, what are the odds?
Fluor Corp is a possibility but are already under FEMA contract.
So who will it be smart guy?
4 - Dave Nalle
Well, Marc. Apparently there are those who'd rather hire a smaller company which will do the job less well for more money just because they're not Halliburton or Bechtel.
Oh, and Cooper - let's see your evidence that Cheney played any role at all in getting Halliburton this contract.
Dave
5 - RogerMDillion
"Apparently there are those who'd rather hire a smaller company which will do the job less well for more money"
Of course, because a smaller company is guaranteed to do it less well for more money. Turn in your libertarian card.
A tad ironic that you make claims with no evidence and then demand evidence from someone else.
6 - Douglas Anthony Cooper
Marc, it's not *my* call. It's the call of whomever is set up to weigh these bids, and decide. What's particularly appalling is that this administration, far from worrying about justice, isn't particularly concerned about the *appearance* of justice. Simply doesn't matter to them. What the hell: toss it to Cheney's boys -- the cherry bowl's ours for the picking, and if they complain? Well, what can they do....
Whereas we know very well what *they* can do. Don't we.
"A senior US Army official who criticized the way Halliburton Co., Vice President Dick Cheney's former firm, was awarded noncompetitive contracts was demoted for poor performance, although previous assessments gave her a high job rating.
"Bunnatine Greenhouse, who worked in military procurement for 20 years and who in the Senior Executive Service was the chief overseer of contracts at the Army Corps of Engineers, which managed construction in Iraq, has been assigned to a lower position in the corps' civil works division, The New York Times reported Monday."
(http://www.isn.ethz.ch/news/sw/details.cfm?id=12648)
The fact, Marc, is that neither of us is "smart" enough to make this judgment call. *Nobody* is smart enough to prejudge this. Let's get the bids in, and have a neutral body examine them and choose.
And Dave, there are not a lot of companies who could do the job less well, it would appear; nor corrupt enough to charge more money -- judging from what we're learning about Iraq.
If the job ends up going to Halliburton, after an open and transparent bidding process, then fine. You see, the funny thing about capitalism, is that *the bidding process itself* keeps costs down. (And, in Halliburton's case, might even keep them honest.)
7 - Douglas Anthony Cooper
(make that "whoever")
8 - Douglas Anthony Cooper
Oh, and Dave: my evidence that Cheney had some part in this? My evidence is that there was *no bid.*
9 - Dave Nalle
Roger, ever heard of such things as economy of scale, start-up expenses and even such a general concept as efficiency? The companies with the properly trained people and resources are usually best to do a given job. You know what will happen if we hire a smaller company? They'll charge us 20% more and subcontract all the work out to Halliburton.
>>If the job ends up going to Halliburton, after an open and transparent bidding process, then fine. You see, the funny thing about capitalism, is that *the bidding process itself* keeps costs down. (And, in Halliburton's case, might even keep them honest.)<<
You know, they can just write the bid specifications such that no one but Halliburton can meet them. All they're doing with the no-bid contract is cutting out that step.
>>Oh, and Dave: my evidence that Cheney had some part in this? My evidence is that there was *no bid.*<<
Ah, so that would be no evidence at all.
Dave
10 - RogerMDillion
I see. I had no idea that Haliburton came into being as a large, experienced company rather than growing through "internal growth and acquisition", which is what they claim on their website.
"They'll charge us 20% more and subcontract all the work out to Halliburton."
If there's no-bid, then how do you know they will charge 20% more? And if they do, then they don't get award the contract. Dave, ever heard of such things as competition in the marketplace?
11 - zyzzy zyzwyz
Do you have any clue what you are talking about? First, Davis-Bacon wages were waived which means that the companies do not have to pay the UNION wages and can pay standard commercial wages instead. Minimum wages remain in effect under a different law.
Second, with everyone screaming about getting the work started how do you expect the federal government to get bids. First you must write a statement of work, then provide time for bidders to give a price. All this takes weeks sometimes months.
Third, Halliburton has been given no no-bid contracts here. The base contract for disaster recovery was completed earlier for just such a case as this. This work is just a delivery order on that competetive contract.
Fourth, who do you think Halliburton hires? They hire local or semi-local contractors to do the work and provide management services. Something that there aren't enough government personnel to do.
12 - Douglas Anthony Cooper
First, let's get some things straight. Davis-Bacon says nothing about *union* wages. It's true that the Independant, quoted above, used the wrong term: Davis-Bacon does not guarantee "minimum" wages either. The appropriate term is "prevailing" wages. In other words, you have to pay a worker what that worker would usually earn in the district. Which may or may not be union rates. In fact:
"In New Orleans, where a quarter of the city was poor, the prevailing wage for construction labor is about $9 per hour, according to the Department of Labor. In effect, President Bush is saying that people should be paid less than $9 an hour to rebuild their communities." (George Miller D-Calif)
You may or may not have an argument regarding the need to get things done too quickly to allow for a proper bidding process. At least, you may in the case of Louisiana. You sure as hell don't when it comes to the no-bid contracts offered in Iraq. And I suspect you don't here, either: yes, the process might have to be sped up considerably, but what do you lose? That you might end up contracting someone *else* as inefficient and dishonest as Halliburton?
That Haliburton has been given "no no-bid contracts" goes contrary to everything reported in the legitimate press. Care to offer sources?
13 - Douglas Anthony Cooper
(er, "Independent")
14 - Dave Nalle
>>I see. I had no idea that Haliburton came into being as a large, experienced company rather than growing through "internal growth and acquisition", which is what they claim on their website.<<
That was then, this is now.
>>If there's no-bid, then how do you know they will charge 20% more? And if they do, then they don't get award the contract. Dave, ever heard of such things as competition in the marketplace?<<
Yes. Please point out the viable competitors who are able to qualify for this contract.
>>That you might end up contracting someone *else* as inefficient and dishonest as Halliburton?<<
BTW, the charges against Halliburton over poor accounting and overcharges were dropped. It might behove you to remember that, rather than spreading half truths for political reasons.
Dave
15 - Douglas Anthony Cooper
Which "charges" would those be, Dave? The audit on the part of the DDAA? And I quote:
"The Department of Defense Audit Agency, in a detailed review, criticized the company for failing to provide 'current, accurate, and complete data' on the financials of its Iraq work, noting the error was so bad 'it decreases the government confidence in and reliance on the contractor estimating system.'
"Halliburton, at the time, disputed many of the findings. But it admitted, in a submission to the Defense Contract Audit Agency in December 2003, that 'we did not use current, accurate or complete information that was available for pricing of subcontracts.''
http://business.bostonherald.com/businessNews/view.bg?articleid=103196
Now let's see. They were audited, found desperately wanting, and admitted to poor accounting. What part of that truth strikes you as merely half?
16 - zyzzy zyzwyz
washingtonpost.com
Halliburton Subsidiary Taps Contract For Repairs
By Lolita C. Baldor
Associated Press
Monday, September 5, 2005; A20
An Arlington-based Halliburton Co. subsidiary that has been criticized for its reconstruction work in Iraq has begun tapping a $500 million Navy contract to do emergency repairs at Gulf Coast naval and Marine facilities damaged by Hurricane Katrina.
The subsidiary, Kellogg, Brown & Root Services Inc., won the COMPETITIVE BID contract last July to provide debris removal and other emergency work associated with natural disasters.
Jan Davis, a spokeswoman for the Naval Facilities Engineering Command, said yesterday that KBR would receive $12 million for work at the Naval Air Station at Pascagoula, Miss., the Naval Station at Gulfport, Miss., and Stennis Space Center in Mississippi. KBR will receive $4.6 million for work at two smaller Navy facilities in New Orleans and others in the South.
The company has provided similar work after major disasters in the United States and abroad for more than 15 years, including in Florida after Hurricane Andrew.
or maybe Halliburton Watch:
Halliburton gets Katrina contract, hires former FEMA director
1 Sept. 2005
WASHINGTON, Sept. 1 (HalliburtonWatch.org) -- The US Navy asked Halliburton to repair naval facilities damaged by Hurricane Katrina, the Houston Chronicle reported today. The work was assigned to Halliburton's KBR subsidiary under the Navy's $500 million CONCAP contract awarded to KBR in 2001 and renewed in 2004. The repairs will take place in Louisiana and Mississippi.
as for the prevailing wages see the last paragaph where this is a special code next to the labor category (SU) if the wage is NOT the union wage:
General Decision Number: LA030014 08/12/2005 LA14
Superseded General Decision Number: LA020014
State: Louisiana
Construction Type: Building
Counties: Jefferson, Orleans, Plaquemines, St Bernard, St
Charles, St James, St John the Baptist and St Tammany Counties
in Louisiana.
BUILDING CONSTRUCTION PROJECTS (Does not include Treatment
Plants or single family homes & apartments up to and including
4 stories)
Modification Number Publication Date
0 06/13/2003
1 12/29/2003
2 01/30/2004
3 03/12/2004
4 04/02/2004
5 05/21/2004
6 07/09/2004
7 10/15/2004
8 11/19/2004
9 02/04/2005
10 04/08/2005
11 05/06/2005
12 08/12/2005
ELEC0130-006 09/01/2004
JEFFERSON, ORLEANS, PLAQUEMINES, ST. BERNARD, ST. CHARLES, ST.
JAMES, AND ST. JOHN THE BAPTIST PARISHES:
Rates Fringes
Electrician (includes low
voltage wiring and
installation of fire alarms,
security systems, sound and
communication systems,
telephones, computers, and
temperature controls)..........$ 22.09 6.00
----------------------------------------------------------------
ELEC1077-003 03/01/2005
ST. TAMMANY PARISH:
Rates Fringes
Electrician (includes low
voltage wiring and
installation of fire alarms,
security systems, sound and
communication systems,
telephones, computers, and
temperature controls)..........$ 17.99 5.15
----------------------------------------------------------------
* IRON0058-011 06/01/2005
JEFFERSON, ORLEANS, PLAQUEMINES, ST. BERNARD, ST. CHARLES, ST.
JAMES (Southeastern Portion), ST. JOHN THE BAPTIST, AND ST.
TAMMANY PARISHES:
Rates Fringes
Ironworker, reinforcing and
structural.....................$ 18.20 5.93
----------------------------------------------------------------
* IRON0623-007 06/01/2005
ST. JAMES PARISH (Northwestern Portion):
Rates Fringes
Ironworker, reinforcing and
structural.....................$ 18.35 5.49
----------------------------------------------------------------
PAIN1244-001 04/01/2005
Rates Fringes
Glazier........................$ 16.62 4.67
Painter (includes brush;
roller; spray; and drywall
finishing).....................$ 14.88 4.32
----------------------------------------------------------------
* PLUM0060-007 06/01/2005
JEFFERSON, ORLEANS, PLAQUEMINES, ST. BERNARD, ST. CHARLES, ST.
JAMES (Southeastern Portion), ST. JOHN THE BAPTIST, AND ST.
TAMMANY PARISHES:
Rates Fringes
Pipefitter (excludes HVAC).....$ 22.25 6.03
----------------------------------------------------------------
PLUM0198-007 07/01/2005
ST. JAMES PARISH (Northwestern Portion):
Rates Fringes
Pipefitter (excludes HVAC).....$ 18.59 6.98
Plumber (includes HVAC pipe
and installation of system)....$ 18.59 6.98
----------------------------------------------------------------
SFLA0669-003 01/01/2005
Rates Fringes
Sprinkler Fitter...............$ 22.87 9.00
----------------------------------------------------------------
SULA2004-003 03/25/2004
Rates Fringes
Carpenter
Drywall & Metal Stud
Installation................$ 14.00 0.70
Formbuilding/Formsetting....$ 12.70 0.56
All Other Work..............$ 13.68 0.00
Cement Mason/Concrete Finisher.$ 12.28 0.00
Laborers:
Common......................$ 9.55 1.05
Mason Tender................$ 9.32 0.00
Power Equipment Operator
Backhoe/Excavator...........$ 14.00 0.42
Bulldozer...................$ 15.17 0.00
Crane.......................$ 14.00 1.80
Roofer (including Built Up,
Composition and Single Ply)
(includes metal roof)..........$ 12.28 0.00
Sheet Metal Worker (excluding
HVAC duct).....................$ 13.26 1.91
----------------------------------------------------------------
WELDERS - Receive rate prescribed for craft performing
operation to which welding is incidental.
================================================================
Unlisted classifications needed for work not included within
the scope of the classifications listed may be added after
award only as provided in the labor standards contract clauses
(29CFR 5.5 (a) (1) (ii)).
----------------------------------------------------------------
In the listing above, the "SU" designation means that rates
listed under the identifier do not reflect collectively
bargained wage and fringe benefit rates. Other designations
indicate unions whose rates have been determined to be
prevailing.
17 - Dave Nalle
>>Now let's see. They were audited, found desperately wanting, and admitted to poor accounting. What part of that truth strikes you as merely half?<<
You left out the part where the audit determined that there was no evidence sufficient to prove any overcharges and they dropped their intent to fine Halliburton and request restitution.
Dave
18 - Dave Nalle
Zyzzy - what is the second number after the dollar value for each of the occupations listed?
It looks to me like the wages they're being allowed to pay are pretty fair wages for non union workers in the region. Certainly comparable with wages paid here in Texas. Over $9 for unskilled labor isn't so bad.
Dave
19 - zyzzy zyzwyz
The second number is the fringe benefits like health care and such that the employer collects but doesn't pay to the employee.
20 - Dave Nalle
Ah, that makes sense then. Thanks.
I don't see a great festival of exploitation in those figures. Not by any stretch of the imagination.
Dave
21 - zyzzy zyzwyz
Well, these rates are the "normal" wages required of government contractors. Reconstruction contractors can now pay from the minimum wage $5.15 and upward depending on the labor category since the DB wages have been waived.
22 - Douglas Anthony Cooper
>You left out the part where the audit determined >that there was no evidence sufficient to prove any >overcharges and they dropped their intent to fine >Halliburton and request restitution.
In short, that Halliburton got away with it? Let's see: they were accused of shoddy accounting; they *admitted* as much; but they somehow didn't get properly hauled up on the carpet. Doesn't that strike you as, well, fascinating? And the notion that the charges have been completely dropped, and Halliburton exonerated, is just, um, half-true:
"Another USACE whistleblower, Bunnatine H. Greenhouse, also spoke before the committee. Greenhouse's allegations of contracting abuse are being investigated by the Justice Department and the Pentagon's inspector general. Nevertheless, USACE recently demoted her after she disclosed her complaints to Congress. "I was removed because I steadfastly resisted and attempted to alter what can be described as casual and clubby contracting practices by the U.S. Army Corps of Engineers commanders, and because I presented testimony before this body on June 27, 2005," she said. "
That's from Sept. 16, 2005, on HalliburtonWatch. These inquiries have *not* been shelved.
23 - Nancy
Whatever the actual wages, the net effect is an image of vast & egregious impropriety, cronyism, fiscal corruption, & violation of a host of US laws regarding awarding of contracts, which the Bush administration has grown increasingly callous about breaking. BushCo seems to be intent on providing the most arrogant & blatant violations possible in any situation, & daring anyone to challenge them and/or bring them to justice, knowing it's impossible with a packed congress more than ready to protect this administration regardless of the scandal & lawbreaking. One more example of Smirk doing his best to bring this country down into the dirt with himself. Ceasar's wife should be above suspicion - not beneath contempt.
24 - Maurice
What a bunch of superstitious witch burners! Haliburton is many things. The comments here make it sound as if it is a single entity. It would be analogous for me to say McDonalds has dirty bathrooms because I used a dirty bathroom in Woodland Hills once. McDonalds has many bathrooms - some are very clean some are dirty. Haliburton is made up of many entities - some very good some not. It is not accurate to say Haliburton 'is nothing short of Stalinist central planning in free-market drag'.
25 - troll
headline - Haliburton descends into corporate anarchy Unable to provide the central planning necessary to rebuild the south
troll