Privatization advocates consistently promise that outsourcing government tasks will yield greater efficiency and cost savings for taxpayers. The results do not always meet expectations - it turns out that the government can be even less efficient at contracting out its work than it is in doing the work itself. The Federal Times recently reported a case in point: $15 million gone missing after it was erroneously paid to a contractor to clean up a plutonium production site in Washington state. Here's the introductory material from the article:
Almost a decade after demanding that a contractor return a $15 million bonus, Energy Department officials still don't know if that money was ever recouped. In an audit released this week, the department's inspector general said the contractor, Bechtel National Inc., never reimbursed a "performance fee" that DOE awarded it in 2003 and then later revoked. The fee was for Bechtel's production of a processing vessel to be used at a radioactive waste treatment plant in the cleanup of Hanford Nuclear Reservation, a former plutonium production site in Washington state. But Energy Department officials later concluded that the company had failed to meet contract requirements to fully check the vessel for faulty welds. In early 2004, they asked for the money back. While Bechtel expressed interest in a "mutually acceptable resolution," according to the audit, neither the company nor the government could supply evidence that the money was ever returned.
- Dru Stevenson