Posted on 01/07/2019 5:10:28 PM PST by 11th_VA
Democrats say the Trump administration is asking for more money for a border wall even though it has spent only 6 percent of the funds that Congress has appropriated for border security over the past two years. That’s misleading. About 60 percent has been awarded to contracts.
This talking point raises wonky aspects of the federal budget process. But Democrats gloss over the fact that most of the money has been obligated and most has been specifically awarded to contracts.
Andrew Meehan, a spokesman for U.S. Customs and Border Protection, told us that “CBP has obligated more than 90% of the funds provided in FY 2017 and 2018.” An “obligation” is “[a] definite commitment that creates a legal liability,” according to the Government Accountability Office. “An agency incurs an obligation, for example, when it places an order, signs a contract, awards a grant, purchases a service, or takes other actions that require the government to make payments to the public or from one government account to another,” GAO explains.
More specifically, “nearly 60% of those funds are obligated onto a contract – referred to as contract award – by the U.S. Army Corps of Engineers,” Meehan said. The expenditure occurs after the work is completed, “making expenditure an inaccurate measure of execution,” he said in an email to FactCheck.org.
The Democrats focus only on those actual expenditures. In an interview on ABC’s “This Week” on Dec. 23, Sen. Jeff Merkley said the president was “sitting on over $1 billion, 94 percent of what we sent him last year for border security he hasn’t bothered to spend. If you’re not going to spend nine out of 10 dollars on an issue, you obviously don’t care about it that much. This is politics, not policy.”
But the president wasn’t “sitting on” all of that money. Some actions had been taken to transfer funds to the Army Corps of Engineers and further to award contracts. When we asked Merkley’s office about that, spokeswoman Martina McLennan responded: “Of the $1.3 billion Congress appropriated in FY18, as of the latest data Congress received from the Administration on November 26th, only 6 percent has been ‘expended,’ a term which means the same as ‘spent.’ While the Administration argues they have signed contracts with companies for more of the funds, those contracts do not mean funds have been spent, and construction has not yet even started on any of the projects obligated for the $1.3 billion Congress appropriated in FY18, which ended in September.”
Let’s go through the numbers, provided by CBP.
The fiscal year 2017 and 2018 appropriations included a total of $1.7 billion to CBP for new and replacement border fencing and barriers. And nearly all of that has been obligated to the U.S. Army Corps of Engineers. About $300 million is yet to be awarded to a contract, but was on hold during the government shutdown, Meehan said. And there was $175 million left for CBP “project management” support.
Specifically, of the $341 million appropriated in fiscal 2017, $300 million was on contract by late December 2018, and 35 of the 40 miles of scheduled replacement pedestrian and vehicle barriers had been completed. The fiscal 2018 appropriations included $1.375 billion for 82 miles of new and replacement barriers. By July 2018, CBP had obligated — essentially transferred — $1.2 billion to the Army Corps. And by Dec. 31, 2018, nearly $700 million of that had been awarded to contracts.
The Washington Post Fact Checker wrote about this issue on Jan. 3, tracing the Democratic talking point back to a Dec. 10 statement by Sen. Patrick J. Leahy. A member of Leahy’s staff told the Post that the obligations to the Army Corps amounted to just “a bureaucratic shift to another government agency.” But then, of course, there are the actual contract awards.
CBP says nearly 60 percent had been awarded to contracts, and that’s documented by various CBP press releases on such contracts, as the Fact Checker noted.
McLennan, in Merkley’s office, argues that the lack of actual expenditures shows the administration is “severely backlogged in their ability or interest in actually doing this work, which again begs the question why they would need $5 billion more for FY19.” But CBP’s Meehan told us the fiscal 2018 funds were obligated in less than nine months, a period of time he called “the equivalent of light speed in the federal contracting world.”
In fact, the 2018 appropriations bill was belatedly signed into law on March 23, 2018 — that’s nearly six months after fiscal 2018 started on Oct. 1, 2017.
Joshua Gordon, policy director at the Concord Coalition, a nonpartisan organization that advocates fiscal responsibility, told us this is one of the problems with the budgeting process. Agencies face difficulties when there are continuing resolutions and late passage of appropriations bills, “sometimes so late in the fiscal year, it’s almost impossible to get things done in that fiscal year.”
Gordon says while the Concord Coalition primarily looks at outlays — which occur when the checks from the government actually clear — in this mini-controversy, the contracted amount “makes the most sense as a measuring stick.”
One “piece of irony,” he notes, is that “it seems like the government shutdown is actually going to hamper the ability to get some of these contracts done.”
Meanwhile, President Donald Trump claimed in the Jan. 2 cabinet meeting that he and Acting Defense Secretary Patrick Shanahan had instituted a new system to not pay government contractors if their work was unsatisfactory.
“Somebody said that we didn’t spend the money,” the president began. “Well, we have spent it, but we don’t pay contractors before they finish the job. That’s one of the other things that Pat and I sort of instituted. We like to have people do the work. … We pay it when it’s finished so they do a good job. This way, if they don’t do a good job, we don’t pay them.”
We asked the White House press office if and when the president had instituted such a new policy, and we didn’t receive a response.
But the president had a point when he said, “not all of the money has been paid, but the money has been used.” About 60 percent has been awarded to contracts.
I can envision typical proglibs dull stare and slack-jawed lack of understanding for any such concept.
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This was stated during the FakeNews CNN reporter blow back that began with him explaining that steel is stronger than cement.
Status Report!
During the Trump Administration, About $266 million of the $400 million FY17 money is now on contract. Some had to be spent on Program overhead; including plans, surveys and property settlement/acquisition (which has been front loaded, so future awards will be faster). Some small reserve is likely, in case of cost over runs, like potential hurricane damage.
About $923 million of the $1.3 billion FY18 money is on contract, and another $175 million is designated for Program overhead, leaving about $200 million left to contract (I expect an RGV-01 Segment South of McAllen to cost about that, and should be coming soon).
Here is the blow by blow:
San Diego, California 14 miles of 18 foot bollards with anti-climb plate are being built (9 complete), due to finish by May. FY 2017 appropriations. The $147 million contract for this project was awarded to SLSCO, a Texas-based construction corporation.
A second 14 mile layer of 30 foot bollards has been awarded, and will start February 2019. The contract was awarded on December 20, 2018 to SLSCO Ltd. using CBP’s Fiscal Year (FY) 2018 appropriations. The total contract value, including options, is approximately $287 million (and includes the 15 miles below in Tecate, Andrade and Calexico).
Tecate, California 3 miles of 30 foot bollards contract awarded, should start early 2019.
Andrade, California One mile of 30 foot bollards (one side of the Port of Entry), contract awarded, should start early 2019.
Calexico, California 2.25 miles of 30 foot bollards West of the Port of Entry, completed. FY 2017 appropriations, about $18 million.
11 miles of 30 foot bollards East of the Port of Entry, contract awarded, work to start in the Spring (FY18, included above).
Yuma, AZ 27 miles, Contract awarded, construction is scheduled to begin in April 2019. Fiscal Year 2018 appropriations awarded on November 13, 2018 to Barnard Construction Company, Inc. for the base contract of $172 million for approximately 14 miles (13 Option miles, plus 5 miles in Lukeville, below). Total contract value, including options, is approximately $324 million.
Lukeville, AZ 5 miles Contract awarded, construction is scheduled to begin in April 2019.
Santa Teresa, NM (Western flank/suburb of El Paso) 20 miles of 18 foot bollards with anti-climb plate. Complete. CBP awarded a construction contract January 22 to Barnard Construction of Bozeman, Montana. FY 2017 appropriations. The project cost is approximately $73.3 million.
El Paso, Texas 4 miles of 18 bollards with anti climb plate East from the Port of Entry to Fonseca Drive. Complete. CBP awarded a construction contract June 1, 2018 to West Point Contractors of Tucson, FY 2017 appropriations, 22 million.
Mission, Texas (Western Flank of McAllen Port of Entry) 8 miles of hurricane rated levee wall system, topped with 18 foot bollards. Contract awarded, construction is scheduled to begin in February 2019. This is the area with many of the test cases that were pursuing legal challenges (La Lomita Chapel, National Butterfly Center Ray Anzalduas). (FY) 2018 appropriations. The contract for this project, referred to by CBP as RGV-02, was awarded on November 11, 2018, to SLSCO in the amount of approximately $167M.
Donna/Weslaco, Texas, (Eastern flank of McAllen metro area, East of the Santa Ana Reserve) 6 miles of hurricane rated levee wall system, topped with 18 foot bollards. Contract awarded, construction is scheduled to begin in February 2019. (FY) 2018 appropriation. The contract for this project, referred to by CBP as RGV-03, awarded on October 31, 2018 to SLSCO Ltd in the amount of $145 Million for construction.
Brownsville, Tx Area 7 (with an option for 4 more) automated gates to be constructed, to begin closing the 35 road gaps left in the area during the Bush-era Secure Fence Act barrier construction. (FY) 2017 appropriation. The contract for the first phase of gate construction was awarded on October 3, 2018 to Gideon Contracting, LLC, from San Antonio, Texas in the amount of $3,731,380 for the seven base gates. The contract includes options for four additional gates valued at $1,985,525.
All of this that has been put on contract so far during the Trump Administration totals 115 miles - probably what the President was referring to on Christmas Eve.
The pace of construction this year will be significantly higher than last. In 2018, 35 miles were built over four different segments. Already awarded for this year are 80 miles across thirteen segments (one of the Texas awards is composed of five separate segments).
There is a lot of time left this year for more contract awards, it they get more money. The planning, design and administrative lead time is pretty well done, so they are able to start awarding contracts more quickly now.
I am in the govt. Getting contracts in place is incredibly complex and slow. No one even mentioned the time for contractor protests over a contract. My organization had a contractor protest his own contract award.
The govt is so worried about fraud and waste in contracts that it would rather spend $20 to ensure that $1 of fraud doesn't happen, so you have a lot of restrictions on what can and cannot be done. Additionally, you have contracting officers that are more worried about the contract fitting boiler plate (so you don't get a protest), that actually accomplishing the mission takes a back seat.
“Getting contracts in place is incredibly complex and slow.”
Having the President requiring weekly progress updates, and constantly lighting fires under the SecDef and SecDHS, can help speed things up. Especially having a President who is world class subject matter expert in building things.
The Army Corps of Engineers developed two large standing multiple award task order contracts (MATOCs) to support the Project Office:
(A Western one) W9126G18R0096 MATOC for Horizontal Construction Services in support of the San Diego, El Centro, Yuma, and Tucson Border Patrol Sectors.
(And an Eastern one) W9126G18R0092 MATOC for Horizontal Construction Services in support of the Rio Grande Valley, Laredo, Del Rio, Big Bend and El Paso Border Patrol Sectors.
A pool of vendors have been pre-qualified to participate in these contracts, to use a rapid bidding process to compete on task orders for individual segments of wall. Those vendors have been brought up to speed on the Master Project Management Plan - the exact route, the design requirements and specifications; and they have a very good idea of the priority list. So they are ready to bid pretty quickly when an individual segment comes up for bid.
17 wall segments have been awarded so far (including 5 on one task, 3 on another), for a total of over a billion dollars. Three have been completed - Calexico, CA (West), Santa Teresa, NM; and downtown El Paso. They have basically committed or expended the ($1.7 Billion) funds they have already received (~$200 million remains, which they will likely award in the RioGrande Valley South of McAllen soon).
So now they are ready to start committing new funds in earnest. This is the point in the program for the money bomb - the preparations have been made, and both the vendors and the Government side are ready to ramp up.
They now have the process down to a practiced and proven rhythm of notifying landowners, conducting final surveys, finalizing eminent domain, issuing waivers for 28 restrictive laws (environmental, endangered species, archaeological, etc.), and giving the winning vendor notice to proceed. Those vendors are incentivized for early delivery, and have been doing so.
The pace of construction will be faster this year than last, based on the recent awards (about 80 miles awarded in the last few months, groundbreaking within weeks). But if the President gets a few billion, we will really be off to the races.
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