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Not everyone will benefit from shutting down this war.

By       Message James Conner       (Page 1 of 1 pages)     Permalink

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Not being an intellectual or a scholar, what I am understanding lately is that certain companies have been awarded multi-billion dollar government contracts without the competitive bidding process. Regardless of the rationale for this, it has created an expensive situation for our government; ergo, we the tax payers.

In some cases these companies have been found guilty of fraud by the GAO and been fined a few million dollars. Comparing the fine to the multi-billion dollar contract, is doesn't seem necessarily punitive nor an incentive for the company not to commit fraud.

These same companies have also been fined a few million dollars for missing the objectives in their original multi-billion dollar contracts. They are then fined a few million dollars and awarded another contract for the same work. This too, is done without a bidding process. The new contract is again worth billions. Keep in mind they have already been paid the lions share of the billions for the first contract.

One flaw in this process is the financial temptation that the government has created to lead the companies into screwing up their work in order to receive another contract without significant monetary consequence. Quite the opposite. A rudimentary example would be if you give me a billion dollars to do a job and then you charge me a million dollars because I didn't get it done. You then give me another billion dollars to do the same job...well, I might be tempted to keep this going on as long as I could get away with it.

Not allowing competitive bidding is fraught with problems and normally results in excessive costs. I would never have done this when I was in business. Not getting competitive bids for work to be done would be financially imprudent if I were trying to obtain the best deal. I don't do it when getting bids for work on my home either. When a vendor screws up work I have them do, they don't get paid. What a concept.

Taking the current process in awarding contracts for work in Iraq to the extreme, could result in never getting the job satisfactorily completed, while continuing to be charged over and over for the same work.

I ignored the labor union issue for the purpose of this blog. That pesky federal law about prevailing wages, etc.

I have to remind myself of the difference between a million dollars and a billion dollars:

In order to spend a million dollars at one thousand dollars a day, it would take me two years and nine months to get rid of it.
In order to spend a billion dollars at one thousand dollars day, it would take me two thousand, seven hundred and forty years to spend it all.

That example seems a bigger difference than just changing the 'm' in million to a 'b'.

I've never had a billion dollars, nor will I likely to ever have than much money. The way my government continues to spend, it's highly unlikely that my great, great, great grandchildren will either - unless the cost of a gallon of gasoline becomes a million dollars. The government may then increase the minimum wage.

 

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Retired USMC officer and businessman.

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Not everyone will benefit from shutting down this war.