Why are there no-bid government contracts for feeding the troops, driving oil trucks and securing oil fields?

Question

Aren't the food service, trucking and security industries pretty competitive?

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Answer 1

Urgency is often the rationale for sole source contracts, and cost uncertainty the rationale for cost-plus contracts. They permit the government to get contractors working as quickly as possible. Competitive contracts have been awarded in very short times. However, such speedy procurements are not easily done and are thus relatively unusual.

Legal reasons for sole source contracts include:

(1) only one firm has a product that will meet the projects needs or only one firm can do the work;
(2) the existence of an unusual and compelling urgency;
(3) for purposes of industrial mobilization or expert services;
(4) an international agreement;
(5) sole source is authorized or required by law, e.g., socio-economic programs;
(6) national security; and
(7) the public interest.

Use of such authorities requires written justification and approval at specified levels. See 48 CFR Ch. 1, Subpart 6.3.

The Bush Administration, for example, has made several no-bid contracts. Just days after Hurricane Katrina, in September, 2005, the Bush administration awarded similar no-bid reconstruction contracts to companies such as Fluor Corp., Bechtel, Shaw Group, CH2M Hill Cos, and Halliburton's Kellogg, Brown and Root

Both the much-disputed Iraq reconstruction no-bid contracts and those awarded after Hurricane Katrina contained "cost-plus" provisions "that guarantee contractors a certain profit regardless of how much they ultimately spend," according to the Wall Street Journal. Critics claim that such agreements "remove any incentives for private companies to control expenses, which are paid for by the tax-payer."'

Answer 2

Urgency and ability to perform the job. I do not know of too many food service or trucking industries that are prepared to take the risks involved in providing personnel and equipment in combat areas. This is sort of a niche that requires a high degree of speciality. Just as Haliburton does not compete with Tyson Chicken to sell you frozen drumsticks, Tyson has little interest competing with Haliburton.

There are may electronic component manufacturers and suppliers but few bother going through the hassel of getting certified to handle military specifications or submit to all the security checks.

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Answer 3

Sole source procurements may arise from a number of circumstances. Among them are:


Equipment for which there is no comparable competitive product, for example, a one-of-a-kind oscilloscope that is available from only one supplier.


Public utility services from natural or regulated monopolies.


A component or replacement part for which there is no commercially available substitute, and which can be obtained only from the manufacturer.


An item where compatibility is the overriding consideration, such as computer operating software enhancements for an existing system.


A used item, for example, a television transmitter tower, that becomes immediately available and is subject to prior sale.


A supply, equipment, part, service or supplier that, due to technically constraining factors associated with scientific research, are needed to ensure the fairness and validity of the underlying research.


A supply, equipment, part, service or supplier that is specifically and clearly required by a grantor, contractor, donor, or other provider of funds where the usage of those funds is specifically, explicitly, and clearly restricted by the grantor, contractor, donor, or other provider.

There are two types of sole source assertions.


Supplier - This type of sole source asserts that one and only one supplier is capable of delivering the good or service needed, and that the supplier is peculiarly qualified in the entire market place to do so.


Brand name - This type of sole source asserts that one and only one brand of good or service is capable of addressing the need, and that the brand is peculiarly capable in the entire market place to do so.

Answer 4

Well its less competitive when you are in a war area, not many firms want to risk lives on their employees except at high costs, A firm must be vigilant in training, investigating the background of their employees and familiar with the country they are in. The contracts if people actually investigate them will see it was not the Bush administration who started these and put them in place but the Clinton administration especially those with Halliburton.

Answer 5

No bid contracts = war profiteering