KATRINA: No-Bid Contractors At it Again

[FreeChile]

C'mon. Add insult to injury. Are these four companies the only players in this business?

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/09/AR2006080901931.html

Big Katrina Contractors Win More FEMA Work

By Griff Witte and Spencer S. Hsu
Washington Post Staff Writers
Thursday, August 10, 2006; Page D01

The four giant construction firms that received controversial no-bid contracts to house Hurricane Katrina evacuees last September will be earning up to $250 million apiece to do similar work after future disasters, the Federal Emergency Management Agency said yesterday.

Unlike the Katrina deals, the contracts announced yesterday were awarded after a bidding process. But most of them went to the same four firms: Bechtel Corp., CH2M Hill Cos., Fluor Corp. and Shaw Group Inc. Two new consortia of companies were also chosen for a share of the work. Together, the six winners will receive up to $1.5 billion for hauling and installing temporary trailers to house evacuees during future emergencies.

 

[Rob Lister]

C'mon. Add insult to injury. Are these four companies the only players in this business?

http://www.washingtonpost.com/wp-dyn/content/article/2006/08/09/AR2006080901931.html

The four giant construction firms that received controversial no-bid contracts to house Hurricane Katrina evacuees last September will be earning up to $250 million apiece...

Full stop.

"earning" may be the wrong word here. If it is, you should strive to use the right one even if the reporter did not. My guess is that, even if true, the contracts are for 250m...non-annualized/total...and probably represent a profit of less than 3% of that sum in actual net. That's a marginal margin...if you will.

Additionally, since you say it is a non-bid, are you sure it is not a delivery order off a previously competed-for and won IDIQ contract?

man bites dog...without a doubt. The extent is the only thing in question.

ETA: I figured that out even before I read the article...I'm so good...

Lee stressed that the awards were made based on open competition from a field of 13 proposals and that winners were chosen because they offered the best combination of price and capacity to do the work.

Yep, full and open "best value" bid. Thirteen contractors bid for it (100 could've but didn't, maybe because they saw it as too-too risky in terms of win profits), three won. Not at all unusual. Appears to be an IDIQ type. That's Indefinite Delivery-Indefinite Quantity. You can damn well bet they cut their cost to the bone to win it. 3% may be an overestimate but I figure it's close enough for government work.

 

[canadarocks]

As a person who works for one of the four, I can tell you that there are only a limited number of Big companies interested in these contracts and that have the resources to complete the contract. (My specific work, however, would not include the stuff in these contracts).

 

[Rob Lister]

As a person who works for one of the four, I can tell you that there are only a limited number of Big companies interested in these contracts and that have the resources to complete the contract. (My specific work, however, would not include the stuff in these contracts).

Which explains only thirteen bids. It's a tough business. The margin is very slim and the management has to be exacting to actually make a profit. The workers for contracts such as these are not exactly on the high-end scale of edumacated dependable workers. I suspect a good minority, if not majority, have SSN's of dead people. The Contractors job here is to 1) Not get caught (winkwinknudgenudge) and 2) turn a profit.

canadarocks, not trying to say anything bad about the company for whom you work but that's my gut instinct. I willingly accept correction without demanding evidence.

 

[Metullus]

I would have been very surprised if three of those chosen, Bechtel, CH2M Hill, & Fluor, where not on the list. They are all among the very few companies that are equiped to provide the services contracted. As for the no-bid awards last year: were I asked who to call in just that sort of emergency Bechtel would be first on my speed-dial, with Flour a not-so-close second.

ETA: I have worked with, but never for, Bechtel, CH2M Hill, & Fluor over the years.

 

[canadarocks]

"Which explains only thirteen bids. It's a tough business. The margin is very slim and the management has to be exacting to actually make a profit. The workers for contracts such as these are not exactly on the high-end scale of edumacated dependable workers. I suspect a good minority, if not majority, have SSN's of dead people. The Contractors job here is to 1) Not get caught (winkwinknudgenudge) and 2) turn a profit."

What you get when you hire these Big companies is their management expertise. Most of these companies have professionals (i.e., college degrees required) that would then hire/work with subcontractors who do the "grunt work". Depending on the work, the Big companies will use a mix of technical professionals (for the technical/design-type aspects) and non-technical people (subcontractors - typically small, disadvantaged, or WBE companies) for the implementation.