Military Budgets

[GMDino]

Admittedly this does not say "no bid".


http://www.ibtimes.com/winner-most-iraq-war-contracts-kbr-395-billion-decade-1135905

Quote:And The Winner For The Most Iraq War Contracts Is . . . KBR, With $39.5 Billion In A Decade



The accounting of the financial cost of the nearly decade-long Iraq War will go on for years, but a recent analysis has shed light on the companies that made money off the war by providing support services as the privatization of what were former U.S. military operations rose to unprecedented levels.

Private or publicly listed firms received at least $138 billion of U.S. taxpayer money for government contracts for services that included providing private security, building infrastructure and feeding the troops.

Ten contractors received 52 percent of the funds, according to an analysis by the Financial Times that was published Tuesday.

The No. 1 recipient?

Houston-based energy-focused engineering and construction firm KBR, Inc. (NYSE:KBR), which was spun off from its parent, oilfield services provider Halliburton Co. (NYSE:HAL), in 2007.

The company was given $39.5 billion in Iraq-related contracts over the past decade, with many of the deals given without any bidding from competing firms, such as a $568-million contract renewal in 2010 to provide housing, meals, water and bathroom services to soldiers, a deal that led to a Justice Department lawsuit over alleged kickbacks, as reported by Bloomberg.
Who were Nos. 2 and 3?

Agility Logistics (KSE:AGLTY) of Kuwait and the state-owned Kuwait Petroleum Corp. Together, these firms garnered $13.5 billion of U.S. contracts.
As private enterprise entered the war zone at unprecedented levels, the amount of corruption ballooned, even if most contractors performed their duties as expected.

According to the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan, the level of corruption by defense contractors may be as high as $60 billion. Disciplined soldiers that would traditionally do many of the tasks are commissioned by private and publicly listed companies.

Even without the graft, the costs of paying for these services are higher than paying governement employees or soldiers to do them because of the profit motive involved. No-bid contracting -- when companies get to name their price with no competing bid -- didn’t lower legitimate expenses. (Despite promises by President Barack Obama to reel in this habit, the trend toward granting favored companies federal contracts without considering competing bids continued to grow, by 9 percent last year, according to the Washington Post.)

Even though the military has largely pulled out of Iraq, private contractors remain on the ground and continue to reap U.S. government contracts. For example, the U.S. State Department estimates that taxpayers will dole out $3 billion to private guards for the government’s sprawling embassy in Baghdad.

The costs of paying private and publicly listed war profiteers seem miniscule in light of the total bill for the war.

Last week, the Costs of War Project by the Watson Institute for International Studies at Brown University said the war in Iraq cost $1.7 trillion dollars, not including the $490 billion in immediate benefits owed to veterans of the war and the lifetime benefits that will be owed to them or their next of kin.  

https://www.washingtonpost.com/business/economy/no-bid-us-government-contracts-jump-9-percent-despite-push-for-competition/2013/03/17/9f6708fc-8da0-11e2-b63f-f53fb9f2fcb4_story.html

Quote:No-bid U.S. government contracts jump 9 percent, despite push for competition



President Obama in 2009 told federal agencies that no-bid contracts were “wasteful’’ and “inefficient.’’ Four years later, his administration spent more money on non-competitive contracts than ever before.

Federal agencies awarded $115.2 billion in no-bid contracts in fiscal year 2012, an 8.9 increase from $105.8 billion from 2009, according to government data.

The jump unfolded even as total contract spending decreased by about 5 percent. Lockheed Martin, Boeing and Raytheon were top recipients of sole-source contracts.

Those top Pentagon vendors and other large contractors can draw on established relationships with procurement officers to claim a greater share of non-competitive work, said Robert Burton, former acting administrator of the Office of Federal Procurement Policy under George W. Bush.

“It highlights a growing problem in the procurement system,’’ said Burton, who represents contractors as a partner at Venable in Washington. “The pie is shrinking, but at the same time, the number of non-competitive awards has increased. That’s a bad combination.”

Joe Jordan, head of the Office of Federal Procurement Policy, said the administration “believes in taking maximum advantage of competition, including efforts to reduce sole-source contracting, and this is an important component of our overall efforts to achieve the best value for the taxpayer.’’

Record amount
Still, Obama ended his first term spending more on non-competitive orders. In 2009, contracts awarded without competition made up about 20 percent of total dollars awarded, compared with about 23 percent in fiscal 2012. The figures may be understated because the data excluded contracts for indefinite quantities of goods or services.

“While there is more work to be done, agency efforts have produced good results in our efforts to increase the use of competition,’’ Jordan said in an e-mail.

He didn’t answer questions about why no-bid contracts had increased during Obama’s first term or describe any concrete steps taken to curb the awards.

Federal agencies consider just one company for a job when they need urgent action, when a vendor has specialized expertise or when they want to keep working with a proven supplier. Such contracts save time in procuring equipment and services, though they lack the competitive bidding that can drive down prices.

Bethesda-based Lockheed Martin, the No.­ 1 U.S. contractor, captured the greatest share of no-bid contracts in the budget year that ended on Sept. 30, with about $17.4 billion. Boeing received the second-largest amount, about $17.1 billion. Raytheon in Waltham, Mass., was third with about $7.04 billion.

The Pentagon last year spent about $100 billion on no-bid contracts, the most of any federal agency, compared with $90 billion in fiscal 2009. The Department of Defense didn’t provide a comment for this story.

“We compete for many of our contracts, while in other cases we are awarded single-source contracts in those situations where the government determines that is the best course for meeting their requirements,” said Daniel Beck, a spokesman for Chicago-based Boeing.

“It is typical for a company to receive follow-on contract awards on programs that have been openly competed in the past,’’ Melissa Hilliard, a spokeswoman for Lockheed, said in an e-mail. “Such follow-on contract awards would be considered non-competitive contracts.” A spokesman for Raytheon didn’t comment.

U.S. Rep. Sam Graves (R-Mo.), the chairman of the House Small Business Committee, said the increase in sole-source awards “is proof that this administration is paying lip service to small business and competition.’’

Small business
Contracts awarded to small businesses fell by about 4 percent in Obama’s first term, according to government data.

“It is unacceptable that noncompetitive awards grew by $9 billion while small business awards shrunk,’’ Graves said in an e-mailed statement. “It will require more work from senior agency officials, and possibly the White House, but more must be done.’’

In his March 2009 memo to agencies, Obama said a reliance on non-competitive orders “creates a risk that taxpayer funds will be spent on contracts that are wasteful, inefficient, subject to misuse, or otherwise not well designed to serve the needs of the Federal Government or the interests of the American taxpayer.’’

Shifting to full and open competition “could result in savings of billions of dollars each year for the American taxpayer,’’ he said.

The Office of Management and Budget released guidance on the contract awards process the following October, calling for agencies to evaluate their use of no-bid contracts.

The memo said that non-competitive “contracts carry risk of overspending because they have been negotiated without the benefit of a direct market mechanism.’’ The document directed agencies to consider mitigating that risk by limiting the length of awards, ensuring fair prices and regularly assessing contractor performance.

Obama can “send out nice memos, telling agencies not to sole-source, but the law hasn’t changed,’’ said Joe Hornyak, a Tysons Corner-based partner at law firm Holland & Knight.

Hornyak said that by law, many sole-source contracts require the approval of a senior official, meaning that the administration could have crafted a better record on competition.

“I would expect senior officials to be more sensitive to the optics of a sole-source award under this administration,’’ Hornyak said.