CRUISE CONTROL?
By Jonathan Weisman
Washington Post
9/27/05
On Sept. 1, as tens of thousands of desperate Louisianans packed the New Orleans Superdome and convention center, the Federal Emergency Management Agency pleaded with the U.S. Military Sealift Command: The government needed 10,000 berths on full-service cruise ships, FEMA said, and it needed the deal done by noon the next day.
The hasty appeal yielded one of the most controversial contracts of the Hurricane Katrina relief operation, a $236 million agreement with Carnival Cruise Lines for three ships that now bob more than half empty in the Mississippi River and Mobile Bay. The six-month contract — staunchly defended by Carnival but castigated by politicians from both parties — has come to exemplify the cost of haste that followed Katrina's strike and FEMA's lack of preparation.
To critics, the price is exorbitant. If the ships were at capacity, with 7,116 evacuees, for six months, the price per evacuee would total $1,275 a week, according to calculations by aides to Sen. Tom Coburn (R-Okla.). A seven-day western Caribbean cruise out of Galveston can be had for $599 a person — and that would include entertainment and the cost of actually making the ship move.
"When the federal government would actually save millions of dollars by forgoing the status quo and actually sending evacuees on a luxurious six-month cruise it is time to rethink how we are conducting oversight. A short-term temporary solution has turned into a long-term, grossly overpriced sweetheart deal for a cruise line," said Coburn and Sen. Barack Obama (D-Ill.) in a joint statement yesterday calling for a chief financial officer to oversee Katrina spending.
Carnival's bid totaled $192 million over six months, plus $44 million in reimbursable expenses, such as port charges, fuel, food and docking costs. To Carnival executives, the contract will ensure only that the company breaks even when it pulls three ships from holiday operations. About 100,000 passengers had their vacations canceled to accommodate the government's needs, said J. Michael Crye, president of the International Council of Cruise Lines, who has been answering questions about the deal for Carnival.
"In the end, we will make no additional money on this deal versus what we would have made by keeping these ships in service," said Jennifer de la Cruz, a Carnival spokeswoman. "That has been our position from the outset, and it has not changed."
Government contracting officials defended the deal. "They were the market," Capt. Joe Manna, director of contracts at the Sealift Command, said of Carnival. "Under the circumstances, I'd say we're getting a pretty good value."
Coburn and Obama disagreed. "Finding out after the fact that we're spending taxpayer money on no-bid contracts and sweetheart deals for cruise lines is no way to run a recovery effort," they said in the statement.
The Carnival deal is only one of several instances in which a lack of FEMA preparation may have left federal taxpayers with an outsized bill. Despite its experiences with last year's busy hurricane season, FEMA found itself without standing contracts for standard relief items such as blue tarps to cover damaged roofs, according to Thomas A. Schatz, president of Citizens Against Government Waste.
"It is ridiculous that they can't have the supply on hand for these basics that you know you'll need in every instance," Schatz said.
The rest of the article is at http://www.msnbc.msn.com/id/9507503/ if you can stand to read further.
Washington Post
9/27/05
On Sept. 1, as tens of thousands of desperate Louisianans packed the New Orleans Superdome and convention center, the Federal Emergency Management Agency pleaded with the U.S. Military Sealift Command: The government needed 10,000 berths on full-service cruise ships, FEMA said, and it needed the deal done by noon the next day.
The hasty appeal yielded one of the most controversial contracts of the Hurricane Katrina relief operation, a $236 million agreement with Carnival Cruise Lines for three ships that now bob more than half empty in the Mississippi River and Mobile Bay. The six-month contract — staunchly defended by Carnival but castigated by politicians from both parties — has come to exemplify the cost of haste that followed Katrina's strike and FEMA's lack of preparation.
To critics, the price is exorbitant. If the ships were at capacity, with 7,116 evacuees, for six months, the price per evacuee would total $1,275 a week, according to calculations by aides to Sen. Tom Coburn (R-Okla.). A seven-day western Caribbean cruise out of Galveston can be had for $599 a person — and that would include entertainment and the cost of actually making the ship move.
"When the federal government would actually save millions of dollars by forgoing the status quo and actually sending evacuees on a luxurious six-month cruise it is time to rethink how we are conducting oversight. A short-term temporary solution has turned into a long-term, grossly overpriced sweetheart deal for a cruise line," said Coburn and Sen. Barack Obama (D-Ill.) in a joint statement yesterday calling for a chief financial officer to oversee Katrina spending.
Carnival's bid totaled $192 million over six months, plus $44 million in reimbursable expenses, such as port charges, fuel, food and docking costs. To Carnival executives, the contract will ensure only that the company breaks even when it pulls three ships from holiday operations. About 100,000 passengers had their vacations canceled to accommodate the government's needs, said J. Michael Crye, president of the International Council of Cruise Lines, who has been answering questions about the deal for Carnival.
"In the end, we will make no additional money on this deal versus what we would have made by keeping these ships in service," said Jennifer de la Cruz, a Carnival spokeswoman. "That has been our position from the outset, and it has not changed."
Government contracting officials defended the deal. "They were the market," Capt. Joe Manna, director of contracts at the Sealift Command, said of Carnival. "Under the circumstances, I'd say we're getting a pretty good value."
Coburn and Obama disagreed. "Finding out after the fact that we're spending taxpayer money on no-bid contracts and sweetheart deals for cruise lines is no way to run a recovery effort," they said in the statement.
The Carnival deal is only one of several instances in which a lack of FEMA preparation may have left federal taxpayers with an outsized bill. Despite its experiences with last year's busy hurricane season, FEMA found itself without standing contracts for standard relief items such as blue tarps to cover damaged roofs, according to Thomas A. Schatz, president of Citizens Against Government Waste.
"It is ridiculous that they can't have the supply on hand for these basics that you know you'll need in every instance," Schatz said.
The rest of the article is at http://www.msnbc.msn.com/id/9507503/ if you can stand to read further.
1 Comments:
Seems like the companies yearly financial statements should confirm or negate their claim of no profit. The real question is whether it was the most effective use of resources and whether alternative options would have made sense under the circumstances. Whether the alternatives were obvious, etc, etc.
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