Thursday, July 30, 2009

Outside Help: URS Corp.

URS Corporation is a large publicly-traded construction and engineering firm based in San Francisco. It is also one of the three outside firms who helped plan and design the extra 160 parking spots at Eltingville Transit Center.

According to a March 3 regulatory filing, URS expects 35% of its 2009 revenue to come from government spending. At that point, it had $10.2 billion worth of government contracts in its backlog.

URS expects 2009 revenues to be between $9.5 and $10.0 billion. Last year, revenues increased 87.4% to $10.1 billion from $5.4 billion in fiscal 2007.

At $50.55, URS stock is up 16% from a year ago while the S&P is still off by 23%.

Just Like WSP Group, URS Corporation was on a buying binge in 2007 and bought Washington Group International, an engineering firm with 25,000 employees that year.

Outside Help: WSP SELLS

One of the 3 outside firms helping absorb the $400,000 budget for planning and designing the 160 parking spots is British-owned engineering and design firm, WSP SELLS, based on information from the NY Department of Transportation.

The Sells-side of the deal is the American part. Charles Sells founded the design firm in 1925 and it was acquired by the London-based WSP Group in 2007.

In its 2008 annual letter, WSP Group Chairman David Turner noted, "WSP Sells, which is a leading bridge inspector and infrastructure specialist in the USA, is already seeing benefits from the US Governments' stimulus package."

Publicly-held WSP' revenues increased in 2008 by 36% to $1.2 billion from $920 million the year before. It has 10,000 employees.

Will Plan and Design Asphalt Parking Spots for $133/hr

Eight or nine New York Department of Transportation staffers and outside consultants worked on planning and designing Eltingville's additional 160 open-air asphalt parking spots, amounting to 3000 billable hours over a 16-month period, based on my Q&A with the NY Department of Transportation.

With the final bill coming to $400,000, the brains behind this project clocked an average $133 an hour during a recession. Nice work if you can get it. Since it's highly unlikely that the staffers on the project made that much, I wonder what the consultants charged.

I'm requesting details of payments made to outside firms from the New York Department of Transportation.

This may be all above the board, but the simple fact that adding 160 extra parking spots to a relatively new lot costs $400,000 in planning and $2.6 million to build still blows my mind.

Watchdog Groups Allege Mirky Connections between Bechtel and Gov't

Bechtel Corp. one of the three outside firms who helped plan and design the 160 parking spots, (Its billable hours and payment have not yet been disclosed), has an interesting history procuring profits from the federal government according to the Center for Public Integrity:

"Bechtel's relationships with policymakers and officeholders dates back to the early part of the Twentieth century when Stephen D. Bechtel (shown) partnered with John A. McCone, who went on to become chief of the CIA under President John F. Kennedy and introduced the Bechtels to many influential figures.

In the 1970s, Bechtel hired a slew of government officials to help with its expanding international operations: former Secretary of Health, Education and Welfare Casper Weinberger (who would leave in 1980 to serve as Reagan's Defense Secretary); Atomic Energy Commission chief executive Robert Hollingsworth; former ambassador to Turkey and Saudi Arabia Parker T. Hart; and John G. Dillon, a retired rear admiral who directed the Pentagon's construction policy."

Among other shenanigans, "Bechtel is also the subject of a review ordered by Gov. Mitt Romney of Massachusetts over its handling of the nation's largest urban transit construction project in Boston. Known as the "Big Dig" for the giant, 10-lane tunnel it aims to install under city streets, the project, contracted to Bechtel and construction firm Parsons Brinkerhoff in 1985, is currently about $1.6 billion over budget."

Bechtel also caught a lot of heat for its lucrative role in cleaning up after Hurricane Katrina. See the Washington Post article about it.

Bechtel was one of 4 large firms with extensive government ties to win a $500 million no-bid contract from the Federal Emergency Management Agency. A year later, the Government Accountability Office would show that three of the companies had lost millions in taxpayer money due to poor planning. In all, the 4 firms secured $3 billion from September 2005 to March 2007.

From a 2007 PBS Interview with a New Orleans lawmaker:

(PBS) JEFFREY KAYE: After Katrina, FEMA awarded no-bid trailer contracts to four well-connected companies. FEMA gave the Mississippi contract to the Bechtel Corporation, one of the largest engineering, construction and project management companies in the world.

REP. GENE TAYLOR (D),R Mississippi: They did a crummy job, and they can't tell me otherwise because I'm from here.

JEFFREY KAYE: Democratic Congressman Gene Taylor is building a new house on the property in Bay St. Louis, Mississippi, where his old home, destroyed by Katrina, once stood. He's been a dogged critic of Bechtel.

REP. GENE TAYLOR: I know the people that were hurt by their lack of actions, and I know how much money they squandered that could have been done a heck of a lot cheaper, and they'll never convince me otherwise.

JEFFREY KAYE: Taylor says FEMA gave Bechtel a cost-plus contract, which pays for expenses and overruns and offers no motivation to minimize costs.

REP. GENE TAYLOR: The more money they spend, the more people they hire, the more needless layers of bureaucracy they put in there, they get paid a profit on top of every expenditure they run up.

Bechtel also played a controversial role rebuilding Iraq, leading to major federal investigations into whether the money it and other firms were awarded were properly spent.

In a
2003 article, CorpWatch alleged that Bechtel Corp and its owner had built a tangled web with the federal government, landing countless million and billion dollar contracts along the way.

'After the company's owner, Riley Bechtel, (son of Stephen) was appointed as the Bush Administration's adviser on how to create markets for American companies overseas, his firm's first contract in Iraq covered virtually all the major projects in the war-torn country including "seaports, two international and three domestic airports, potable water, electric power plants, roads, railroads, schools, hospitals and irrigation systems.'

At the time, CorpWatch's Pratap Chatterjee noted that some lawmakers were pushing for a bill that would force 'the government to explain publicly how contracts have been awarded under a limited bidding process.'

Ron Wyden, a Democratic Senator from Oregon, sponsored the bill."You look at this process, which is secret, limited or closed bidding, and you have to ask yourself: `Why are these companies being picked?' Wyden, told the New York Times.

Outside Help: Bechtel Corp.

Bechtel Corp was one of the three firms to help plan and design the additional 160 spots. according to my Q&A with the New York Department of Transportation.

The total bill was $400,000 to the add extra spaces to the existing 5-year old lot.

The privately held company is based in San Francisco and has 44,000 employees. It's proprietor, Riley Bechtel, is the 261st richest man in the world according to Forbes. It is the largest engineering firm in the U.S.* and the 7th largest privately-held company in the country, also according to Forbes. Check out its sweet promotional video. I was waiting for Steven Segal to come into the scene at some point.

In its last fiscal year, revenue climbed to $31.4 billion from $27 billion in 2007, while the value of new work booked rose to $35 billion from $34.1 billion, producing the firm's sixth straight year of record total sales and third consecutive year of record bookings.

Operations in North America were responsible for 40% of earnings and 2/3 of bookings. Government contracts are a key component of its book of business. I emailed Bechtel's Mike Kidder to see how much.

Also from Forbes:
In its 110-year history, four generations of Bechtel family members have been engaged in projects in civil infrastructure, power, petrochemicals, telecommunications and government services. Notable jobs completed by Bechtel include the Channel Tunnel connecting England and France; Jubail Industrial City in Saudi Arabia; and Hong Kong International Airport.

*From Bechtel's website:
"That makes Bechtel the largest telecommunications engineering and construction firm in the United States, with nearly seven times the revenue of its nearest competitor."

Wednesday, July 29, 2009

NY Department of Transportation Speaks

Many thanks to Adam Levine, public affairs officer at the NYDoT, for answering these questions about the $400,000 being spent to 'plan and design' the additional spots before taking off for vacation.

He actually pulled a 24-hour turn around which is pretty amazing considering I'm an unpaid citizen activist blogger.

1.) How many people were involved in planning and designing this lot and over what period of time? What would be the estimated number of hours spent to bill $400k?

Including NYSDOT and consulting engineering staff, 8-9 people worked on the project over a 16-month period, spending a total of about 3000 hours designing the expansion.

As with the cost estimate, I will be glad to share with you the fruits of their labor, in the form of the project plans, once the project has been awarded.

2) Were any outside design/planning firms hired? Who were they?
The consulting firms that assisted us in preparing the design were a joint venture among Bechtel Corp., WSP Sells and URS Corporation. As they are working under the direction of the department, I ask that you direct your questions to me and I will get your answers. One person's muzzling is another person's taking responsibility and standing up for our actions and decisions.

3) What needs to be done to plan and design 160 open-air parking spots?
As each site is unique, we can say that in this case, traffic and environmental issues needed to be analyzed and a design report needed to be prepared summarizing the project analysis. After these were completed, design of the park-and-ride details could be performed.

4) What were some of the obstacles to getting this project through? (You'd mentioned a bird reserve nearby)
I don't recall mentioning birds, but there are wetlands near the project, both existing and recently developed. We also wanted to make sure we stayed within an envelope that would not preclude other uses of nearby land along the Korean War Veterans Parkway, and we also had to make provisions for the temporary retention of storm water on the site, while the existing drainage system was being worked on as part of the expansion.

It's Our Money. Tell Us What It's Paying For.

Of the seven bidding firms, only two have already filled out our survey. The other five, Grace Industries, Lomma Construction, Shamrock Materials, Beaver Concrete Construction and Paul Scariano, aren't returning my calls. I even spoke to live people at a few of the companies.

The truth is they don't have to talk to me. But it certainly would be nice for taxpayers if they would.