Thursday, December 3, 2009

Addicted to Contractors

Entirely anecdotal, but this story from Foreign (published by the Slate Group) only scratches the surface on the cost of "privatizing" government functions. The gist of the story is that although the number of full-time federal employees has not changed since 1963, the function of contract oversight has gotten so tricky, particularly with each federal employee consequently "responsible for the oversight of three times the taxpayer money that they would have been a half-century ago."

So how does this tie into NOPE and Laurelwood housing at Earle, you ask? It speaks of lack of oversight, U.S. taxpayer dollar waste and one of the underpinnings of our thesis that the Navy, by planning to open Laurelwood to civilians in 2010, is putting towns surrounding NWS Earle in the way of severe security and financial peril...solely to escape poor planning and a horrendous contract it signed in 1988. No ifs, ands, or buts.

The Department of Navy had an immediate need for on-base housing back in the 80s and into part of the 1990s at Earle (hence, Laurelwood was built), but signed a 52-year housing contract for the property, knowing full well the occupancy would fall off a cliff with the decision within two years to move the homeport of particular ships to Norfolk, VA. Today, we understand that only 6 of the 300 Laurelwood units are occupied, which at annual rents approaching $4 million this year to Laurelwood's owner, Teri Fischer, equates to a housing rental cost of $667,000 to taxpayers to rent one townhouse!

To be sure, from our reading of documents obtained thru the Freedom of Information Act (FOIA), when the DoN not only signed away its rights to revoke the contract to let Mrs. Fischer refinance her LLC's mortgage on Laurelwood, it also missed out on a $28 million buyout opportunity - an amount the Navy has since spent to uphold the lease. Now it claims to be on the hook for $100 million+ to Mrs. Fischer if it does not open the houses to civilians next year (an entirely bogus argument, even in the eyes of Mrs. Fischer's attorney, as quoted earlier this year in an Asbury Park Press story).

In short, NONE OF US would be in this mess had the DoN not been pigheaded and just bought out the Laurelwood contract when it had the chance...7 YEARS AGO! Now is the time to reach an amicable settlement on the deal and raze the homes, and to move forward from an ugly chapter on privatized housing gone awry.

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