No-bid contract
From Free net encyclopedia
A no-bid contract is a military or government contract that is made directly with a corporation, bypassing the standard process of bidding. These contracts can be made much more quickly than a typical contract, however they are often fraught with suspicion when the company issued the contract has any ties to the administration in power at the time.
The Bush Administration, for example, has made several no-bid contracts. After the 2003 war in Iraq, the Halliburton Company, previously headed by then vice-president Dick Cheney, was issued a $2 billion no-bid contract for fuel distribution. Just days after Hurricane Katrina, in September, 2005, the Bush administration awarded similar no-bid reconstruction contracts to companies such as Fluor Corp, Bechtel Group, Shaw Group, CH2M Hill Cos, and Halliburton's Kellog, Brown & 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 government. (See also: Cost-plus pricino-bid contracts in Kosovo and Bosnia by the Clinton administration.
Speed is the rationale for no-bid cost-plus contracts, which allow the government to get contractors working as quickly as possible. However, some properly competitive contracts have yielded speedy conclusions, such as the development of the GBU-28 bomb, in which the entire process took only a couple of weeks.
Commerce Bank and Commerce National Insurance under the leadership of Vernon Hill and George Norcross have received several no-bid contracts from the state and local governments in New Jersey and Pennsylvania after making massive political contributions.
They are illegal under European Union commissioning law.