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Bush Buddies Get No-Bid Contracts While Workers Get the Shaft

Source: AFL-CIO

Some of the first large-scale Hurricane Katrina relief and recovery contracts awarded by the Bush administration were awarded on a no-bid basis to corporations with strong ties to the administration and the Republican Party, according to news stories in The Wall Street Journal and other media. At the same time, the administration is using the catastrophe to push a reactionary anti-worker agenda, gutting federal regulations that protect worker safety and ensure quality work and living wages.

The no-bid deals include $100 million contracts to the Fluor Corp., a major donor to the GOP, and the Shaw Group, which is client of Joe M. Allbaugh, President George W. Bush’s campaign manager in 2000 and the former director the Federal Emergency Management Agency (FEMA).

Meanwhile Halliburton Co., subsidiary Kellogg, Brown & Root Services received a $29.8 million clean-up contract, while Halliburton, formerly run by Vice President Dick Cheney, is doing repair work at three Navy facilities in Mississippi under an existing contract. The company also has been awarded billions of dollars of federal contracts for work in Iraq and that work and the Bush administration’s Iraq procurement policies have been heavily criticized in recent years.

The Bush administration also is using the disaster to attack federal standards ensuring quality work and worker safety. Last week, the administration announced it was eliminating the high-quality work standards set by the federal Davis-Bacon law for hurricane reconstruction contracts work, allowing contractors to pay substandard wages to construction workers in the affected areas, and the administration also is lifting many affirmative action rules for reconstruction contracts.

Bush now wants to suspend wage supports for service workers in the hurricane zone as it did for construction workers on federal contracts last week, according to
The Washington Post.

The administration also has suspended regulations limiting the number of hours truckers can drive when transporting fuel. In addition, Bush has weakened restrictions giving contracting preferences to small and minority-owned businesses and has suspended the Jones Act, which requires transport of petroleum, gasoline and other petroleum products on U.S.-flagged ships while operating in U.S. coastal waters.

The no-bid contracts “guarantee profits regardless of how much those companies spend or waste,” says
AFT President Edward J. McElroy. “This is happening at the same time that the local hires of these firms will, in many cases, not earn a living wage. It is unconscionable that our national government would act to hurt those most in need while delivering a windfall to wealthy contractors. These decisions must be reversed.”

House Democratic leaders have requested that the Government Accountability Office (GAO) investigate the hurricane reconstruction deals.

In a letter to the GAO, Democrats wrote: “The history of this administration’s handling of federal contracts is one of persistent and costly mismanagement. Oversight of federal contracts has been turned over to private companies with blatant conflicts of interest. In Iraq, billions have been appropriated for the reconstruction effort, yet oil and electricity production remain below prewar levels.…The contracting strategy adopted by the administration suppressed competition on thousands of reconstruction projects, while favored companies like Halliburton received special treatment and lucrative monopoly contracts.”

During a tour of hurricane-ravaged Mississippi, the Rev. Jesse Jackson slammed the no-bid deals.

“We still got families that don’t know if people are dead or missing. While the disconnected and the needy are running from shelter to shelter, the connected and greedy are getting FEMA contracts.…It’s almost like white-collar looting,” he said.


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