Wednesday Waste: All Aboard!
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According to California Watch, the federal government spent an extra $10 million of stimulus dollars to relocate tracks for the Napa Valley Wine Train, a private rail line that is mainly used for tourism. The tracks were being moved as part of a larger project to prevent flooding in the Napa Valley area. Why the extra $10 million price tag?
It turns out that the contract was awarded to a small construction company called Suulataaq Inc., which was formed by Alaska Natives. Under a federal program, this company was eligible to be awarded the government contract without competitive bidding among other companies—which led to a negotiation process that resulted in a government contract of $10 million more than Suulutaaq’s hypothetical bid price, as calculated by Kiewit Corp. construction firm.
A former executive of Suulutaaq testified that Kiewit Corp.’s financial review of the contract informed him that his company would be making “obscene profits.” The project, originally price tagged at $64 million dollars, has now grown to more than $79 million and has beencalled the one of the most wasteful projects that received stimulus funds by Senators McCain and Coburn.
When speaking about how costly the program had become, Robert Brosamer, a Walnut Creek engineering contractor said, “That’s how those deals are, and they are obscene.” Competitive bidding was put in place by the government in order to save money and ensure that the taxpayers were getting the best price for their tax dollars. When the Army Corps of Engineers decides to throw that process out the window for “accelerated” construction, waste is bound to happen. The Napa Wine Train project has yet to be finished.