While I know next to nothing about car restoration, I know something about procurement, albeit at a different level of government. I've been on a dozen or so committees that solicit, evaluate and select respondents. I am the designer of my employer's standard financial analysis that is used to screen out potentially unviable businesses. Here's what I've learned.

The more unique or customized the product or service you seek, the more expensive the bill will be-and there's some reasons for that to occur. The first is because of the uncertainties involved with parts, technologies that might have to be made or developed on the fly. The second is that you'll attract more start-ups, development stage and boutique suppliers. Of course, the more unique or customized the product, the more market power a seller has due to the absence of competitors.

Now for some suppliers, where the product or service is commoditized, governments use their market power to exact a lower price. For example, a company like Sopacko (MRE manufacturer) is going to have an assured sale when they get the contract for x million meals-in turn they can mechanize and pressure their suppliers. "Yeah, I'll buy ten million pounds of spuds, but only at..."

However, whether or not the the price is "fair" for the services given the costs incurred by the supplier is second to whether or not this is the best alternative. Management consists in being efficient (doing things right) and effective (doing the right things), something that becomes a more important skill the higher a person rises in rank. Your first level manager is likely focused how to do things, you CEO what things to do.

There are possible alternatives to contracting with Wasatch.

1.) Contracting for an on-site restoration. (It's entirely possible that there was no available vendor for that, or "freeing up" maintenance space has some value).

2.) Having NPS staff perform the work. (Given the shrinking shop force, there was an expressed desire to have routine maintenance done in-house, with restorations performed by contractors-which brings us back to our uniqueness problem.)

3.) Mothball or cosmetically restore the coaches needing extensive restoration, solicit and contract for replicas. (This depends upon several things, including the number of potential vendors and the specifications allowing the use of modern components and materials).

I can also tell you this, outside contracting is treated as a panacea by government, especially in IT, where governments are stuck with archaic systems:

https://fcw.com/articles/2021/10/20/irs ... elays.aspx

It would be interesting to see how the decision to outsource the 1021 restoration was made and how this vendor was selected, especially if there were other respondents.

Many federal programs have competitive sourcing requirements that prohibit the work that the program is funding from being done by federal employees.

I think JR and some other posters may be overlooking the Knowing Endangerment aspect of Count 5 of the Indictment:

Also remember that two Wasatch employees were killed on the job in April of this year (Officials believe spark from maintenance caused Shoshoni rail car explosion) and then the company filed bankruptcy in September.

It seems to me that there is more to this criminal prosecution than just recovering $50k. IANAL, but I assume (1) the criminal case takes precedence over civil litigation and (2) a criminal conviction would heavily influence the outcome of lawsuits over the employee deaths and the bankruptcy.

> It would be interesting to see how the decision to outsource the 1021 restoration
> was made and > how this vendor was selected,
> especially if there were other respondents.

The NPS outsources much of their restoration work. Nothing unusual here in using a contractor to do this CNJ coach. Any number of contracts have been issued to support restoration work at Steamtown. In fact, WRC had other contracts with the NPS for other locations/projects.

As to how the vendor was selected this would have been in the RFP where the evaluation criteria would have been stipulated in great detail. The RFP had been issued under the old FBO system which has been replaced and the archive data lost. We use sam.gov now.

From the link provided above, looks like two bids were received. So, there was competition.

From the link provided above this was a firm fixed price (FFP) contract - you are stuck doing it for the price submitted, period. One change order did add upholstery work.

Contract will not be closed out until the work is done, to include shipping the car back in this case. Paper work can take years to clean up in most cases before a contract is considered closed.

The RFP would provide the wording on work being done on site or the contractor's facility - again need the RFP for that detail.

> I think JR and some other posters may be overlooking the Knowing Endangerment
> aspect of Count 5 of the Indictment:

This looked like over reach to me. Granted the work was required to performed in specified manner, and they allude to the idea that it was not, but the wording in Count 5 seems to go beyond this idea and would be more of an OSHA issue in my mind, not something that a NPS contracts office would deal with.

Our focus here needs to be on the artifact in question - The problem now is the contractor is in bankruptcy and the coach is 2000 miles away from where it needs to be.

J.R. May

I wouldn't worry much about the car right now. It's probably the best (besides documentary evidence) of what was and wasn't done to it, and as such is evidence in the criminal proceeding. I suspect that the US Attorney and Mr. Rimmasch's counsel are taking steps to preserve the car until the criminal matter is resolved.

I don’t even know why I’m bothering to ask, but what becomes of whatever residual funds are left? Are they still available for completion of the contract through another vendor? Or do they go back into the federal piggy bank?

> but what becomes of whatever residual funds are left?

That is actually a good question, a fare question. Looking at what we have of the contract, the start date was to be 08/18/2016 and the completion date of 09/30/2017, so a one year contract.

Further down the listing it states that this is NOT a multi year contract.

My focus is on the DoD side where I have a pretty good feel behind the magic of the budget, so a little weak here on the Interior side, but we know Wasatch asked for progress payments which would be based on some predetermined amount of work having been done before any invoice for that work was submitted and paid for. In theory, a regional auditor would have verified the work was done.

So far we have not seen anything that would suggest that invoices were submitted for work not actually done on the main project. We have only seen such a complaint on the relatively minor asbestos invoicing.

Someone has stated that the car is on shop trucks and does not look done. No idea how real this comment is, but let's assume its factual, thus indicating that the work was not completed. With no indictments on the primary project, I would have to guess that Wasatch did not invoice for work not done.

With that idea in mind what happens to the "left over money?" Figure some work was done, so let's look at $500K that was "left over" for sake of discussion. Again, this was not paid up front so never left the US treasury but was on "on the books" of the NPS at least for Fiscal Year 2016 or 2017. No one in the government ever wants to give money back or leave money unobligated. That is a bad thing. That means you get less next year. So, as the program manager you will find a way to spend that money on something else, to bury it, to protect it. Look at Steamtown in 2018 and ask, was something worked on sooner than you expected? There's your CNJ coach money. I'd look for a contract award made September 2017 burning that CNJ coach "left over money" on some other project. Possible the money could be carried over, but only for a couple of years. We are talking 4 years here now.

Bottom line, if the work was not done, and payments were not made to Wasatch, then the funding found another use.

Educated conjecture based on what we have at the moment.

J.R. May

Interesting. 9-30-2017 was the end of Fiscal Year 2017 (FY17 in Federalese).

Phil Mulligan

I seem to remember at least 400-500k getting allocated for 3713...

Usually when civilian agencies get money from Congress, it comes in different "colors" that include what it can be used for and how long it is appropriated for. The agency I work for usually gets money that we have either two or five years to spend.

If we don't spend - that means getting it off the books; paid out to the vendor - in that time frame it usually goes back to Treasury, although somethings it's written into the appropriation bill that we only have to have it obligated to a contract. Leadership HATES losing any money. I mean REALLY hates it, because it sends the message to Congress that we didn't need the money. So all the senior execs in our agency have a performance metric to not have more than a 4% variance in their budget or it impacts their end of year bonuses.

The appropriation bill that provides the money to the agency describes what it can be used for. Using money for the wrong reason gets the senior execs fired (or retired early). This happened to the director of an agency I worked for when he took money appropriated for upgrading computer systems and used it to pay employees who were working overtime in support of a natural disaster. There was no fraud, but the Senator on the appropriations committee who got the IT money, which was going to a IT contractor in her state was REALLY pissed when the CEO called to say the money was going else where. This resulted in a GAO investigation, two early retirements and a restructuring of the agency.

An agency _can_ go back to Congress and ask if the funds can be extended in life, or used for something else. But this usually has to go up through a Cabinet Secretary. The director of NPS isn't going to be happy going to the Interior Secretary and begging mercy if his/hers people screwed up.

It might have been in the budget for $x to be spent on rail car restorations at the park. Or it could have called out a specific set of equipment. Or those funds might have been in a bigger "bucket" for something like upkeep and maintenance, which would have more leeway to be redirected to something else.

Confused yet?

Bob

There are any number of laws and regulation that are mandated in federal government contracts, many of which don't add anything to completion of the work. They are both social and political. Some examples are environmental protection, anti-discrimination, a floor level of employee benefits, and Buy in America. Like it or not, these requirements are put in place by Congress and they add costs to comply with, report on, and have employees who are conversant in them.

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Well, given what happened in this case, that might not be a bad approach. I’ve dealt with large suppliers who merrily assure you all is well right up until the ship date. Contractors aren’t all honest and trustworthy either. If you can’t be on sight, routine verification is the next best thing.

“But they trust us!” As they should, but trust and verify. Think of how many companies were wonderful until something changes. New owners, new management, corporate culture change. Look at how Sears lasted over a century only to have Kmart kill it. Change happens.

It is really tacky to gloat about the failure of a business in the field of railroad preservation.

On another topic, any new sales from the IOU Pacific liquidation?

The 'everything is under control' until the moment it's not certainly applied to Rader Railcar and finishing up their contracts. An on-site monitor was appointed to make sure that additional funds were actually spent on THEIR projects to get it out the door before it all went south.

I also don't think most funding agencies appreciate the difficulties of restoring old rail equipment, or old anything, for that matter, where you find 'issues' getting into it. Compounding that is that many contractors don't appreciate the difficulty of dealing with funding agencies and the designed-in brick walls of compliance, deadlines, pay scales, etc., etc.. And remember, you just about HAVE to award to a low bidder in a public bid unless you have provable justification for bid disqualification that will hold up, even if you suspect that they may have underbid the job.

It was actually opposite with IP, they were the customer, most of the real damage was to vendors and contractors that got stuck with unpaid invoices for work they did, equipment they 'sold', etc. It sure was a long and painful list.

I haven't seen anything on this one if a performance bond was involved. Many reputable contractors even have great difficulty with that one as these are not big companies.

I really don't revel in this situation in any way or wish to speculate. I've known JR for years and have always encouraged him when he first wanted to get into the business and whatever else you think, he's had a real passion for the equipment and bringing stuff back.