In a sort of throwaway line about Whitefish Energy–the very small Montanan electrical utility that has been tapped to rebuild much of Puerto Rico’s electrical infrastructure, Charles Pierce makes a critical observation (boldface mine):
In addition, if you’re looking for a tell in the whole Whitefish thing, note that the company isn’t being paid $300 million to do the work. It’s being paid $300 million to find people to do the work. I can tell you from 40 years of watching public works here in the Commonwealth (God save it!), if you want to get rich skimming the public trough, this is the way you do it.
When it comes to infrastructure, there is a lot of subcontracting. And it’s not just a single subcontract: sometimes these things end up looking like those Matryoshka dolls. One contractor hires contractors, who hires contractors. Leaving aside whether the work itself is shoddier under this system, every subcontractor gets a profit markup (they’re not doing this at cost). I’ve never dived into large infrastructure contracts (and have no desire to do so), but I suspect this plays a big role in why infrastructure costs are so high in the U.S. Part of this probably stems from state and local agencies lacking capacity to do many functions they used to do, including oversight (which is essentially what Whitefish is getting paid for). Might want to do something about this if we want shiny, new stuff.
Aside: Whitefish really seems to be padding the bills, even by federal contractor standards.