Corporate Contractors’ Heavy Burdens on Taxpayers
Next time you hear federal officials say that there is no money to repair or build necessary public facilities in your community, ask them why there always seems to be money to greatly overpay for government projects routinely outsourced to corporate contractors.
It is important to understand why incomplete projects such as the proposed campus-like Department of Homeland Security in Washington DC, the “cleanup” of the biggest repository of radioactive waste in the US at the Hanford Nuclear Reservation in Southeastern Washington State, the ballistic missile defense program, and the pie-in-the-sky fusion reactors have gone way over budget. They are either behind schedule, or without any clue for completion or cessation.
First the dismal scenes: According to the Washington Post,
“The construction of a massive new headquarters for the Department of Homeland Security (DHS) … is running more than $1.5 billion over budget, is 11 years behind schedule and may never be completed, according to planning documents and federal officials. The entire complex was to be finished as early as this year, at a cost of less than $3 billion.”
Only one of the buildings for the Coast Guard has opened at DHS.
Second, at Hanford, more than $30 billion has already been spent for the “cleanup,” under a Tri-Party Agreement between the U.S. Department of Energy, the U.S. EPA and the Washington State Department of Ecology.
Started in 1989, the effort had a proposed 30 year timetable. Instead, Hanford officials say they are decades and tens of billions of dollars from completion of this admittedly sprawling brew of atomic weapons waste in 177 giant underground storage tanks and nine nuclear reactors.
Third, the much ballyhooed Department of Energy’s Fusion Energy Science program has been receiving federal funding since 1951 and has not yet had a replicable successful discovery from which to generate affordable energy.
It is a boondoggle annuity for contracting university physicists and companies who once in awhile issue a news release announcing a presumed partial step forward as to keep hope alive for awe-struck science writers.
As the late physicist, Norman Milleron, a critic who worked at the Lawrence Livermore Lab was wont to say: “why not focus on the best fusion reactor we’ll ever have– the Sun?
Fourth, for thirty-years the ballistic missile defense pork barrel has fed the likes of Raytheon and the insatiable corporate lobby that has grown up to feed off the tens of billions of dollars already spent– over $9 billion this year, almost as much as the EPA’s budget.
Unfortunately the test results show ballistic missile defense systems don’t work. Nor will it likely ever have substantial success.
So dubious is this endless program, that years ago the American Physical Society delivered the ultimate denunciation: they declared the mission unworkable. The leading opponent, Prof. Theodore Postol of MIT continues to dissect its stumbling, deceptive history and how Congress continues its annual deceptions as it writes gigantic taxpayer checks.
The examples cannot compare to the tens of billions of dollars in ‘cost-overuns’ on the F-35 and F-22 fighter planes whose Pentagon orders from Lockheed-Martin keep being reduced because of the sky-rocketing cost of each plane.
The F-35 is now at $115 million each. The F-22’s last plane in 2009 cost $137 million, the equivalent to $151 million in 2014 dollars. The F-35 is still in early production after decades of trouble.
What gives here? How could the remarkable P-38 of World War II come in at $1.3 million a plane, inflation-adjusted, and be produced so quickly in 1944?
Corporations knowingly submitted unrealistic budgets– “lowballing”– to win federal contracts and funding of these projects instead of opting for adequate, more feasible and frugal alternatives. Congress enacts perpetuating pork barreling by default.
Least noticed are the detailed terms of the contracts themselves.
Tighter contracts could have held the government and contractors’ feet to the fire in a variety of ways that could be culled from the history of past successful projects that came in on time and budget.
Contract terms could include: putting named compliance officers on the hot seat; automatic disclosure to the public of the full texts of the contracts, including their observance over time; more breaking points to penalize and/or jettison contractors; and better oversight of the early planning process by Congressional Committees are roads to good performances.
Powerful special interest lobby push for sweetheart deals. These aforementioned projects will continue to waste taxpayers’ dollars. This crony capitalism is disgraceful.
In all this miasma, there are vastly over-budget delays, screw-ups and incompletions. Nassim Talib elaborated on this topic in his under-appreciated recent book– Antifragile (2012). He writes about the importance of having “skin in the game,” noting that Roman engineers had “to spend some time under the bridge they built– something that should be required of financial engineers today.”
From all pertinent directions regarding a project, the supposedly responsible people need to have skin in the game. It does wonders for focusing attention.
It starts with the people who conceive, plan, and fund projects.
And it doesn’t leave out the lawyers who draft those porous contracts filled with escape clauses.
~Courtesy Ralph Nader and Nader.org
Ralph Nader is one of America’s most effective social critics.
Named by The Atlantic as one of the 100 most influential figures in American history and by Time and Life magazines as one of the hundred most influential Americans of the twentieth century, his documented criticism of government and industry has had widespread effect on public awareness and bureaucratic power.
A prolific author, his inspiration and example have galvanized a whole population of consumer advocates, citizen activists, and public interest lawyers who in turn have established their own organizations throughout the country.
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Our government waste and overspending needs to stop.
In 2009, the United States government spent some $650 billion on its military, more than the next 46 highest-spending countries combined. Much of this ended up in the hands of profit-driven weapons manufacturers.
Congress needs to reign back the wasteful spending, budget overruns, and what President Eisenhower famously called the “military industrial complex.”
With the U.S. having waged two wars overseas at the same time millions of people were out of work at home, those pushing to reel in government spending and balance the budget would be wise to look carefully at bloated and unchecked military spending that has continued ever since.
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