Stimulus contracts favor big, politically connected players

|  June 08, 2009 |

According the Montana’s Missoulian newspaper, local firms and small contractors are losing out on millions of stimulus dollars because a controversial type of contract being used by the federal government favors the big, multi-national corporations. Key quote:

“That’s because the government is using a controversial contracting method that speeds bidding, but also tilts the playing field in favor of mega-companies. It’s called IDIQ contracting, which is shorthand for “indefinite delivery/indefinite quantity,” and it’s essentially an all-you-can-eat money buffet for big corporations.

An IDIQ is a broad and open-ended agreement, in which the government essentially creates a sort of long-term, all-purpose contract under which specific tasks can later be defined. The scheme moves projects quickly – which is a priority for economic stimulus jobs – but critics argue it’s anti-competitive, because only a handful of large firms can afford to engage on such undefined and unrestricted terms.”

What really rips the Montana contracting community is that a capable state firm was passed over for a $78 million border station job that went instead to California-based Parsons Corporation despite the fact that Parsons had been repeatedly cited for shoddy work and cost overruns in its IDIQ contracts in Iraq.

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