Private Sector vs Government

I don't think that the Iraq war is a fair example of demonstrating private enterprise failures. In this instance they act as an extension of government. No bid contracts mean they don't have to compete as they would in a fair/open market. There is no motivation for doing the job cheaper and faster because there is no competition and no controls in place for monitoring them.

JP


I disagree. The Iraq war contracting and outsourcing is the perfect example of war profiteering. The greedy bastids don't give a damn about the troops or the common good of our country.

BBB

I never said they did. They care about profit. No bid contracts allow them to take the the most amount of time possible in order to make the most amount possible. In a free market that company would quickly die due to competition from companies who do the job faster and better.

The problem, once again, is government handing out blank checks and zero accountability.

JB


It's more than government stupidity. It is corporate criminal activity that should lead to more than recovering tax payer's money. The CEOs should take the perp walk to prison. Should the government idiots who wink at private sector criminal activity join them?

BBB

If a law has been broken then those responsible should pay the price. If no law has been broken then the system needs to change in order to stop no-bid contracts and allow for accountability and competition.

You could argue all day that corporations should be more responsible, but when it comes down to it, those companies that have to compete in an open market in order to survive will perform better than those that have a free pass to profit.

Can someone with in depth knowledge of how governmental contracts are awarded please post that procees? I am pretty sure there is quite a bit more involved than what is being led to believe in this thread.

McG,

I am not trying to suggest that all contracts handed out are no bid or that all companies with contracts take advantage of them, but no-bid contracts are a reality in some instances and the lack of accountability and competition is rarely good for tax-payers.

BBB
It's not just non-competitive contracting. Oversight of the contractors was almost non-existent. Governments were charged for goods and services not provided and Governments paid the bills to corrupt contractors. Massive contractor fraud was involved resulting in the waste of billions of tax payer dollars. In Iraq it was caused by the lack of post "shock and awe" planning and control. Same result in the Katrina and Rita hurricane Gulf States - lack of planning and control.

BBB

Re: BBB


BBB, in your first post you are claiming that government does a better job of getting things done than the private sector. Now you are claiming that they are unprepared and lack control over the situation. How does this lend credence to your original statement?

Yes there is corporate corruption, I am certainly not arguing that, but I fail to see how that proves government does a better job.

Re: BBB


JP, I didn't say government did a better job. I said the military does a better job in most cases with some exceptions. But at least the military has some civilian oversight. Oversight has become almost non-existent under the domination of Republicans over government. Same things happens under Democrat domination, but I've never seen so much corruption as under Bush.

What exactly is your point? The military can not do everything in Iraq. You need either the private sector or you need the government. You seem to think that both are to corrupt or incompetent to do anything.

Is just another Bush is Evil thread?

JP


Actually, we needed neither the US government nor the military in Iraq. Our presence in Iraq is our own self-inflicted wounds.

BBB

You have brought your own thread so far off track that I don't even know how to respond.

You start off with an idea that republicans are wrong to think that the private sector does a better job than the government. Some how you make the jump to government being unprepared and out of control (I still fail to see how this is a good alternative to the private sector) then to Bush being corrupt and now you are talking about the necessity of being in Iraq when earlier you used the military as evidence of your original statement, which, apparently, is the government in parenthesis but not when I claim that you claim that the government does a better job that the private sector.

If you are confused by reading that last very long run-on sentence, you now know how I feel trying to understand the point you are making.

JP
JP, I doubt that you don't understand my point. I think you disagree with my point and are nit picking.

But that's OK, I allow one nit picker per day.

BBB :wink:

Where's the Oversight?
Where's the Oversight?
By Michael Hirsh
Newsweek
Monday 13 February 2006

The untold tale of the latest Pentagon budget is the wastage and overpricing that continue to lard it up to the tune of perhaps $100 billion - with Congress scarcely paying attention.

From his earliest days in office, George W. Bush has talked a good game about transforming the military. He even hired a corporate turnaround specialist, Donald Rumsfeld, to accomplish the task. But after Bush earlier this month proposed a nearly half-trillion dollar defense budget for fiscal 2007 earlier this month-one that doesn't include many of the costs of the Iraq war-even some of the president's loyalists were appalled. One of them, Kori Schake, who until recently was director of defense strategy on Bush's National Security Council, last Thursday wrote a blistering op-ed in The New York Times headlined "Jurassic Pork." She noted that Rumsfeld's supposedly transformational Quadrennial Defense Review looks little different from four years ago, and that the latest budget "continues programs and practices that have been made obsolete by technology, innovation and field experience."

But that's only part of the story. The untold tale is the wastage and overpricing that continue to lard up the Pentagon budget to the tune of perhaps $100 billion, with Congress scarcely paying attention. In some cases, corporate welfare-type programs that were launched in the '90s - at a time the Clinton administration felt defense contractors needed help because of post-Cold War budget cuts - are still on the books. And today they are feathering the bottom lines of giant companies like Boeing and Lockheed Martin, even though Big Defense has long since returned to health.

Even some well-meaning reform programs have backfired because of lax oversight by the Pentagon. On Tuesday, Congress will begin hearings on a General Accounting Office report concluding that $8 billion in "incentive fees" given to defense companies over the past three-and-a-half years were largely a waste of taxpayer dollars. The fees were intended as a reward to contractors for delivering faster results and coming in under price. Instead, the GAO says, companies were given incentive fees on 597 contracts for doing nothing.

One of the most worrying contractor practices is to use-or abuse-a little-known provision in acquisition guidelines that permits companies to escape Pentagon and congressional oversight, officials say. How? By pretending that they are competing in the commercial market for big-ticket goods that in truth are being designed for and sold exclusively to the Pentagon. Boeing, for example, sold the Pentagon the $168 billion Future Combat System under such an arrangement, and it was only under pressure from Sen. John McCain's office that the terms were changed to allow performance, costs and pricing on the program to be monitored.

In another instance, Lockheed Martin used a similar provision, called "Part 12" of the Federal Acquisition Regulation (FAR), to win a multi-billion contract to supply C130J transport planes. The plane has more than doubled in price in less than a decade and, by the Air Force's own admission, the government is paying Lockheed a princely 20 to 25 percent profit. One of Lockheed's subcontractors, engine-builder Standard Aero, is now suing it, claiming the bigger company has grabbed its proprietary information under cover of the contract-and again, without Pentagon oversight - a move that it says could hold up needed transport planes for U.S. troops.

After many months of pressure from McCain beginning last April, Lockheed finally agreed to convert the contract to the regular "Part 15" of FAR, which forces the company to reveal pricing and other data to the Pentagon and Congress. But as of last Friday the Air Force's chief procurement officer, Ken Miller, had still not redrawn the contract. "We're like the little Dutch boy sticking his finger in the dike," says one Senate official. Prodded by McCain, the Defense Department's Inspector General is now looking into these and other allegations regarding the abuse of Part 12, says IG spokesman Gary Comerford.

The FAR Part 12 provision was also well-intended. Enacted in 1994, it was a way of encouraging companies soon to be deprived of contracts because of the "peace dividend" to produce "dual-use" goods, and of pushing the Pentagon to buy better, cheaper commercial items off the shelf rather than building everything, even those infamous $468 hammers, on its own. But the contractors learned to game the system while few people were watching.

And now in some cases, like the C130J contract, contractors are using the provision to actually reduce competition without accountability by "insourcing," or cutting out subcontractors. "Procurement guidelines are so complicated they're beginning to look like the tax code," says a senior government procurement official. "No one knows how much this has cost us." Because Congress and watchdog groups are beginning to catch the companies at disguising military goods as commercial, he adds, "they're being a little cleverer now. They're trying to bring it down to the component level, calling it avionics or engines."

Lockheed spokesmen say the criticism of the company's behavior on Part 12 and the C130J contract is unfair. "We invested over a billion dollars of our money in this thing" at a time, in the '90s, when the Pentagon said it couldn't fund it, said one company official, Tom Jurkowsky. Asked whether the C130 was offered for commercial use, he said that at the time it was developed "there was a belief that market and economic conditions were appropriate and this was good airplane to get, say, from an outlying city in Germany to Frankfort, or to take cargo from northern Africa to Paris. That type of thing." Why didn't it sell to commercial carriers? "Because of various economic conditions it didn't work," Jurkowsky said. In any case, congressional critics say, Lockheed learned years ago the plane was not viable commercially, yet it maintained the same contractual free ride.

A Boeing spokesman, Dan Beck, also denies any company wrongdoing. "We don't believe Boeing has ever tried to engage in price gouging or lack of accountability," he said. Last year, however, a Boeing executive who previously had been the Air Force's chief procurement officer, Darlene Druyun, was imprisoned for favoring Boeing in contracts in exchange for personal favors, including the hiring of her daughter and son-in-law. Mike Sears, Boeing's former chief financial officer, was also convicted in the scandal. And in a speech last month, Boeing General Counsel Doug Bain warned 250 top Boeing executives that more indictments could be down the road. He also said the company might have to compensate the U.S. government by up to $5 billion to $10 billion.

Re: BBB


Interesting. Since every single item you listed here is a government responsibility it seems to fly directly in the face of your claims that the government is more efficiant than contractors. Every single item you've listed here is the responsibility of government personnel and agencies.

Private sector should only operate in a market system of manufacturing ofgoods and services, not in government such as lobbying.

Re: BBB


Fishing, you are repeating something first claimed by JL that I did not say. For the second time, I did not say government was more efficient. I said the military acts with more efficiency. In my mind, I separate the efficiency of the military and of the civilian government.

If anyone has mucked up the military, it is the civilian ideologues in the Pentagon.

My biggest anger at the military is the top officer leadership class who put protection of their career advances above that of the lives of the troops and the US people's Common Good.

The best thing the military could do would be to heed President's Eisenhower's warning against the military-industrial complex's domination of policy and budget decisions.

The combination of corporate robber barons and financial self-interest of policy maker of civilian government is writ large on the disasters in Iraq and the Gulf Coast. We ignore it at our peril.

BBB