Category Archives: Oversight/Contract.Management

Pittsburgh mayor Bill Peduto says PWSA at financial crossroads

Source: Bob Bauder, TribLive, September 4, 2018

The Pittsburgh Water and Sewer Authority has two choices: squeeze more than $2 billion needed for replacing outdated and failing infrastructure from 80,000 ratepayers, or partner with a private company to defray some of those costs, Mayor Bill Peduto said Tuesday. Peduto is adamant about maintaining PWSA as a publicly owned system, but he’s open to suggestions from private enterprise on a partnership that would generate additional revenue. The mayor said he’s received more than a dozen offers from companies interested in providing the city with water, including Peoples Gas and Pennsylvania American Water. Peduto said Pennsylvania American, which provides water to the city’s South Hills residents, has offered to purchase the authority outright, but the company said it has not offered an official proposal. …

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From Pittsburgh to Flint, the Dire Consequences of Giving Private Companies Responsibility for Ailing Public Water Systems
Source: Sharon Lerner and Leana Hosea, The Intercept, May 20, 2018
 
The lead crises in Flint and Pittsburgh have many unfortunate parallels. Residents of both cities unknowingly drank water with high levels of the potent neurotoxin, which has long-term health consequences. The rise in lead levels was preceded in both cases by a miscalculation related to chemicals used to control corrosion in water pipes. And in both places, officials have faced criticism for their inaction and failure to alert the public. The two lead crises have another important thing in common: a private water company named Veolia. The world’s largest supplier of water services, Veolia had contracts with both Flint and Pittsburgh around the time that lead levels rose in their drinking water. And in both places, Veolia wound up in legal disputes over its role in the crises. …

Pittsburgh’s Water System Is Why We Shouldn’t Run America Like a Business
Source: Jordana Rosenfeld, The Nation, November 30, 2017

Pittsburgh, in an attempt to deal with entrenched infrastructure problems, turned to the private sector in 2012 when it partnered with the French management firm Veolia North America, the same water-management company that would fail to disclose Flint’s lead-contamination problem in 2015. … The organization lauded Veolia for identifying $2.3 million in new PWSA revenue and $3 million more in operating savings, a move incentivized by their contract that stipulated the company could keep 40 percent of every dollar it saved the city. The Pittsburgh Post-Gazette published a glowing account of PWSA’s partnership with Veolia, despite reports that it laid off 23 employees, many of whom were longtime employees with critical institutional knowledge. … But this August, a consulting group hired to assess the organization’s current state announced in a public meeting that PWSA was “a failed organization atop a dangerous and crumbling structure” with “an aging system in demonstrably worse condition than any water utility of its size in the country.” Not only that, water tests showed that since the partnership began, Pittsburgh’s water had been tainted with dangerously high levels of lead. …

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POGO Identifies Defense Contractors Recently Sanctioned for Human Trafficking Abuses

Source: Neil Gordon, Project on Government Oversight, August 21, 2018

POGO has identified two companies that were recently sanctioned by the government for violating U.S. restrictions on human trafficking. An official in the Pentagon’s watchdog told POGO that Tamimi Global Company and Texas Gulf Global General Trading & Contracting Company were the two of the companies referred to, although not by name, in a recent State Department report. The State Department’s Trafficking in Persons Report 2018 released in June reported: [The Department of Justice] and other federal law enforcement agencies continued to investigate allegations of debt bondage and excessive recruitment fees required of third-country nationals working on certain U.S. government contracts abroad, but no federal criminal prosecutions of employers or labor contractors resulted from these investigations in FY 2017. [The Department of Defense] took action against noncompliant employers or labor contractors from U.S. programs resulting in 22 suspensions, six debarments, one job termination, and one compliance agreement. …

Multnomah County launches investigation into mental health complaints

Source: Keaton Thomas, KATU News, August 16th, 2018

Thanks to a whistleblower and report from the Oregon Health Authority, Multnomah County officials are launching an investigation into how they review mental health complaints from the Unity Center for Behavioral Health. … Multnomah County is the local mental health authority. All complaints of abuse or neglect in the mental health system are directed to it. Last week, county leaders ordered an audit of the complaints reported to the Mental Health and Addiction Services Division. … Issues surrounding Unity Health go back to its beginning, according to Greg Monaco. … “When I started going [to Unity] I was just hearing horror stories from staff,” he said. Monaco says he heard about patients who didn’t know they were kept against their will. He heard about injuries to staff. He heard about employees at Unity who were worried about their safety because of understaffing. … Reports from earlier in the year by the Occupational Safety and Health Administration and the Oregon Health Authority back up Monaco’s claims. In March OSHA cited Unity Health for four violations. It found Unity had not properly handled and investigated injuries to staff members on the job. Last month, a report from the Oregon Health Authority looked into patient safety. It “uncovered several issues that jeopardized patient safety.” …

State launches investigation, assesses $800,000 in damages against SunPass contractor

Source: Hannah Denham, Times Staff Writer, August 14, 2018

After months of inaction, Florida Department of Transportation officials announced today that they are assessing nearly $800,000 in damages against the SunPass contractor responsible for the state’s tolling chaos. At Gov. Rick Scott’s direction, the department also has requested an investigation by the Office of the Chief Inspector General into the contractor, Conduent State and Local Solutions. Last month, the state suspended payments on its $343 million contract with Conduent to update the tolling system, which is now in its third month of dysfunction. The original contract included a clause that if Conduent didn’t provide the system within the timeline that was agreed upon, then the state had the right to collect “liquidated damages” from the company — in the form of $5,000 for each calendar day past the deadline that the system wasn’t ready. …

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SunPass Problems: State awarded contractor millions more while unprocessed tolls mounted
Source: Noah Pransky, WSTP, July 5, 2018

As problems continued to mount for the Florida Turnpike Enterprise’s SunPass system and a backlog of toll transactions grew to more than 100 million, the state didn’t hit its troubled contractor with penalties; instead, it kept awarding contractor Conduent more money, according to new documents obtained by 10Investigates. More than a dozen change orders have increased a $287 million electronic tolling contract to $343 million, including what appears to be more than $20 million for extensions and delays in getting the new, consolidated customer service system (CCSS) functional. Starting on June 12, the state also spent more than $1 million for Conduent to add customer service representatives. A frequent complaint of customers during SunPass’ month-long system outage has been about poor customer service from the Conduent-operated call centers. 10Investigates has reported how Conduent – and its former parent company, Xerox – have had major problems with its electronic tolling systems in at least five states. Yet Florida awarded the lucrative contract to the firm in 2015 anyway. The state has steadily increased the value of the deal since then. …

DeKalb ambulance provider will pay for poor service, county says

Source: Joshua Sharpe, The Atlanta Journal-Constitution, August 7, 2018

DeKalb commissioners on Tuesday voted unanimously to approve a settlement with the county’s ambulance provider after a long history of complaints. Under the agreement, American Medical Response will resolve $1.9 million in contract penalties for allegedly providing poor service — though only $600,000 will be paid in cash. The company, which has been subject to complaints of slow response time such as one in Dunwoody that took 58 minutes, previously declined to settle the fees but agreed to increase performance. Tuesday’s agreement gives $1.3 million credit to AMR for boosting staffing and adding ambulances at two DeKalb fire stations, one in Dunwoody, the other in Stonecrest. …

Contracting Models Shift Dynamics of Engineering and Construction

Source: Jean Pedley, Journal of the American Water Works Association, July 31, 2018

Whether it’s construction of a new treatment plant or a water main replacement project, successfully delivering capital projects in the water industry requires utilities, engineers, and construction experts to work together effectively. Faced with the need to address aging infrastructure and challenged by restrictive regulations, concerned citizens, and attention to budgets, the water industry needs to explore efficient and innovative models for engineering and construction now more than ever. … This article identifies some of the best practices and tools for alternative project delivery that have been tested in a variety of markets, including power generation and water. Successful alternative delivery projects always involve stakeholders who are adaptable and open to collaboration. In addition, the success of alternative project delivery often depends on integration of advanced tools and technology that create efficiencies in tracking and identifying opportunities to avoid project pitfalls. …

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Labor Dept. Wants Religious Freedom Focus in Bias Probes

Source: Ben Penn, Bloomberg Law, August 10, 2018 (Subscription Required)
 
The Trump administration is expanding the circumstances in which federal contractors can use religious beliefs as a defense against job discrimination charges, a move likely targeting the Obama Labor Department’s ban on bias against gay and transgender workers.  The DOL’s Office of Federal Contractor Compliance Programs issued a new enforcement directive Aug. 10 calling for investigators to factor in recent U.S. Supreme Court rulings and White House executive orders that protect religious freedom. Lawmakers, administrative agencies, and courts have grappled with drawing a line between religious liberty and unlawful discrimination. …

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“We just get by check to check”: Workers cheated as federal contractors prosper
Source: Talia Buford and Maryam Jameel, Salon, April 6, 2017
 
… But each year, thousands of contractors enriched by tax dollars skirt federal labor laws and shortchange workers. In fact, U.S. Department of Labor data show that upwards of 70 percent of all cases lodged against federal contractors and investigated by the department since 2012 yielded substantive violations. … The Center for Public Integrity examined a subset of 1,154 egregious violators — those with the biggest fines, highest number of violations or most employees impacted — included in the Labor Department’s Wage and Hour Division enforcement database and cross-referenced them with more than 300,000 contract records from the Treasury Department. The Center found that between January 2015 and July 2016:

  • Federal agencies modified or granted contracts worth a total of $18 billion to 68 contractors with proven wage violations. Among them: health-care provider Sterling Medical Associates, Cornell University and Corrections Corporation of America
  • Of all agencies, the U.S. Department of Defense employed the most wage violators – 49, which collectively owed $4.7 million in back pay to almost 6,200 workers. The department paid those 49 contractors a combined $15 billion
  • Violations by the 68 contractors affected some 11,000 workers around the country — about the same number of people who moved to D.C. in 2016.

…The Labor Department tried to address the problem in 2016 with a rule that would have required federal contractors to disclose wage and safety violations and come into compliance with the law if they wanted to keep doing business with the government. Invoking a statute rarely used prior to the Trump administration, however, Congress voted to undo the regulation — already on hold because of a legal challenge — and Trump sealed its fate with his signature. …

Trump’s Courageous, Valiant Decision to Gut Government Worker Safety
Source: Michelle Chen, The Nation, April 5, 2017
 
As he gets ready to put Americans to work on big-league federal projects, President Trump seeks to cut “burdensome red tape” for federal contractors. But that might mean cutting a few fingers and toes, too. That’s because Trump has repealed an Obama administration executive order ensuring fair pay and safety standards for workers contracted for government projects. So the workers Trump wants to supposedly rebuild bridges and highways will be working under a regulatory regime that’s now more likely to ease up on abusive employers in “public-private partnerships.” …

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How Trump Radicalized ICE

Source: Franklin Foer, The Atlantic, September 2018

… Since its official designation, in 2003, as a successor to INS, ice has grown at a remarkable clip for a peacetime bureaucracy. By the beginning of Barack Obama’s second term, immigration had become one of the highest priorities of federal law enforcement: Half of all federal prosecutions were for immigration-related crimes. … ICE quickly built a sprawling, logistically intricate infrastructure comprising detention facilities, an international-transit arm, and monitoring technology. This apparatus relies heavily on private contractors. Created at the height of the federal government’s outsourcing mania, DHS employs more outside contractors than actual federal employees. Last year, these companies—which include the Geo Group and CoreCivic—spent at least $3 million on lobbying and influence peddling. To take one small example: Owners of ICE’s private detention facilities were generous donors to Trump’s inauguration, contributing $500,000 for the occasion. … An organization devoted to enforcing immigration laws will always be reflexively and perhaps unfairly cast as a villain. … Still, ICE, as currently conceived, represents a profound deviation in the long history of American immigration. …

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For-profit prison company threatens anti-ICE group with lawsuit for telling world what they do
Source: Alan Pyke, ThinkProgress, August 6, 2018
 
A protest campaign targeting for-profit detention company GEO Group with numerous nationwide actions at facilities connected to President Donald Trump’s ramped-up deportations has been threatened with legal action by the company’s high-powered litigators. …

Why It’s Hard To Hold Contractors Accountable For The Suffering Of Immigrant Children
Source: Susan M. Sterett The Conversation, August 2, 2018
 
….Although federal detention is a government policy, the federal government does not directly run most of the facilities where families are detained or kids end up on their own. Instead, it hands nonprofit groups, for-profit businesses and local governments US$1 billion a year or more to house nearly 12,000 children. This money is dispensed through government contracts that do not always gain much public attention.  But now, amid protests and other forms of public pressure, some contractors are severing their ties to the Immigration and Customs Enforcement agency. This is a new development as oversight by government officials and watchdog groups has historically centered largely on costs, fraud or whether contractors broke laws – not whether there was something inherently wrong with the contracts themselves.  Having studied the politics of accountability for many years, I would argue that the responsibility for these unpopular immigration policies largely lies with the federal government, not its contractors…..

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Millions Flow to Pentagon’s Banned Contractors Via a Back Door

Source: Sam Skolnik, Bloomberg Government, August 6, 2018
 
Some of the world’s largest companies have benefited from a little-known law that lets the Defense Department override decisions barring contractors accused or convicted of bribery, fraud, theft, and other crimes from doing business with the government.  International Business Machines Corp., Boeing Co., BP Plc, and several other contractors have received special dispensation to fulfill multimillion-dollar government contracts through “compelling reason determinations.” That process allows the Defense Department in rare cases to determine that the need to fulfill certain contracts justifies doing business with companies that have been suspended from government work.  The 22 determinations were released by the General Services Administration at the request of Bloomberg Government, allowing for the first collective examination of the cases and the system that allowed them. …

… The determinations, also referred to as waivers or overrides, included contracts to provide food services for Defense Department personnel at an Army base in Afghanistan, “vital” web-hosting services for an agency that serves the Pentagon and the U.S. intelligence community, and aviation fuel sold to the Defense Logistics Agency. In some instances, contracting officials said the overrides were matters of life or death. Companies receiving waivers included some accused or convicted of major fraud, wire fraud, conspiracy, ethical bidding violations, and in the case of fuel-seller BP, an overall “lack of business integrity.” In the most recent waiver case—issued just several weeks ago—an affiliate of one of South Korea’s largest conglomerates was suspended for allegedly bribing an Army contracting official and another man to deliver a $420 million contract involving expansion of a U.S. base south of Seoul. …

Ruling unlikely to end Puerto Rico Oversight Board struggle with local government

Source: Robert Slavin, Bond Buyer, July 24, 2018 (Subscription Required)

Puerto Rico bankruptcy judge Laura Taylor Swain’s anticipated ruling on the relative powers of the Oversight Board and the local government is unlikely to end the battle for authority over the debt-burdened U.S. territory. Swain will hear oral arguments Wednesday on an adversary complaint filed earlier this month in the Title II bankruptcy case by Gov. Ricardo Rosselló, in which he argued the local government can’t be forced to follow parts of the board’s fiscal plan that deal with policy. Governance issues are likely to remain whatever her ruling, observers said. … Other Puerto Rico government sectors have followed the government in filing adversary complaints challenging the board’s power. On July 9 Puerto Rico Senate President Thomas Rivera Schatz and Puerto Rico House President Carlos Méndez Núñez filed a complaint similar to the governor’s. On Tuesday the biggest minority party in Puerto Rico, the Popular Democratic Party, said it planned to submit an adversary complaint on different grounds on the same day. …

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Puerto Rico governor names new utility head after board members quit
Source: Reuters, July 18, 2018
 
Puerto Rico’s governor on Wednesday named a new executive director of the bankrupt Puerto Rico Electric Power Authority (PREPA), following the resignation of its former head and four of the utility’s seven-member board last week.  Jose Ortiz will replace Rafael Diaz-Granados, who quit a day after being named executive director, leaving the utility with no leadership amid a massive restructuring effort following devastation wrought by Hurricane Maria last September.  Diaz-Granados and the four other board members resigned after Puerto Rico Governor Ricardo Rosello blasted them for agreeing to pay Diaz-Granados an annual salary of $750,000. The PREPA board unanimously elected Ortiz, an engineer, to the post on Wednesday, Rosello’s office said in a tweet. Ortiz, the fifth PREPA executive director named since the hurricane devastated the island and its electric grid last September, is due to take office on July 23. …

Puerto Rico Bondholders Win Ruling Against U.S.
Source: Andrew Scurria, Wall Street Journal, July 16, 2018
 
A federal judge has refused to absolve the U.S. government of liability for investors’ losses on Puerto Rico bonds, a potential blow to efforts to write down the U.S. territory’s $73 billion debt load.  The ruling issued Friday by Judge Susan G. Braden of the U.S. Court of Federal Claims is an incremental victory for hedge funds fighting to get repaid on the $3 billion in Puerto Rico pension bonds These creditors have targeted the U.S. directly, saying the federal government should make them whole for enacting a 2016 law that set them up for losses.  The lawsuit strikes at the heart of the rescue law, known as Promesa, designed to tackle the U.S. territory’s fiscal crisis. Promesa was designed to avoid a taxpayer bailout of Puerto Rico, creating a court-supervised process for wringing debt reductions from creditors instead. …

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