Beyond Halliburton
Source: Lee Drutman, TomPaine.com, May 22, 2006
In the weeks following Hurricane Katrina, there was much hue and cry about the massive no-bid “cost-plus” cleanup and rebuilding contracts going to politically-connected firms like Bechtel, Fluor and CH2M Hill. And sure enough, eight months later, the first audits are in and it is that same old depressing reel of fraud and waste and mismanagement. ....... We’re talking about double-billing for hauling the same debris, hauling extra debris to boost reimbursements, overstating mileage—the same old tricks. As a neat touch, inspectors found that Army Corps of Engineers officials had an “informal agreement” not to challenge bills that exceeded estimates by 50 percent.
...... The argument then and today is that turning to the private sector harnesses the power of competitive markets. Since companies must compete for contracts, this competition should discipline them into using taxpayer money more efficiently, especially compared to the dreaded government bureaucracy. So why hasn’t this worked? The first reason is that contracting out requires monitoring—and monitoring requires actual people. Over and over again, reports of contractor fraud find at best minimal oversight.