Reuters blog archive
from Stories I’d like to see:
In the wake of the failed launch of Healthcare.gov there has been some spectacular insider coverage, particularly by the Washington Post and New York Times, of the failure of the private contractors to deliver what they promised when they won the assignments to build the federal insurance exchange. But while there has been some mention of problems with the contract procurement process itself (focusing on the notion that in Washington the IT providers who win the contracts are better at winning IT contracts than at doing cutting-edge IT), one piece of the story has so far been missing: Who actually decided to award the Healthcare.gov contract to CGI and the others who shared the work? And on exactly what basis?
We know the winners had invested heavily over the years to get on a list of pre-qualified companies who could bid on contracts like this one, a tortuous process that the best and brightest technology companies outside the Beltway typically don’t bother with because they have too much more rewarding work to do in the private sector, where the bidding process is more straightforward. But we still haven’t gotten a good picture of who in the government runs these processes.
I know from some reporting I’ve done recently that in Kentucky, to take one example, the contractor that won the job to build that state’s Obamacare website was chosen by a committee that did not include the person who was actually in charge of building the Kentucky exchange. In other words, the person who would supervise the outside vendor, and whose career depended on whether the contractor did a good job, had nothing to do with picking the contractor. In fact, I’m told that the official in charge of the website didn’t meet the leader of the contracting team until after the choice was made.
It turns out that the lead Kentucky contractor -- Deloitte Consulting -- did a great job, and its team worked perfectly in synch with the state officials supervising them. But that seems to be more a matter of good luck than a procurement process designed to produce teamwork and accountability. Imagine a private corporation picking a supplier to work on a key project without the executive supervising the project being allowed to meet the supplier’s team leader first.
from Global Investing:
Emerging markets may not have all the technological know-how in civil aerospace, but from China across the world to Brazil, they do have the cash.
The civil aerospace sector performed well in 2013, according to Societe Generale data, trading at a 4 percent premium over the MSCI world index, while the defence sector has steadied, and in the medium to long term civil aerospace should be supported by strong orderbooks from emerging economies.
from Alison Frankel:
Robbins Geller Rudman & Dowd has had more than its share of problems with recanting confidential witnesses in securities class actions, but an 18-page ruling Tuesday from the 7th Circuit Court of Appeals is the worst news yet for the plaintiffs' firm. Judge Richard Posner, writing for a panel that also included Judges William Bauer and Diane Sykes, said the firm had ignored red flag warnings that its lone informant in a securities class action against Boeing was unreliable. No lawyer from the prolific plaintiffs' firm took the trouble of checking out the informant's allegations, Posner said, yet the firm didn't hesitate to repeat his claims in an amended complaint against the aerospace company. The appeals court, not surprisingly, refused to revive the class action claiming Boeing misled investors about its Dreamliner planes, but remanded the case to U.S. District Judge Ruben Castillo to determine whether Robbins Geller should be sanctioned under Rule 11, and, if so, for how much money.
"The plaintiffs' lawyers had made confident assurances in their complaints about a confidential source - their only barrier to dismissal of their suit - even though none of the lawyers had spoken to the source and their investigator had acknowledged that she couldn't verify what (according to her) he had told her," Posner wrote. "Their failure to inquire further puts one in mind of ostrich tactics - of failing to inquire for fear that the inquiry might reveal stronger evidence of their scienter regarding the authenticity of the confidential source than the flimsy evidence of scienter they were able to marshal against Boeing."
from Stories I’d like to see:
A legislature that works:
Maybe it’s because I live in New York and have to read all the time about what may be the world’s two most dysfunctional legislative bodies – in Albany and Washington. But I wish a reporter for a national news organization would try to find the country’s best state legislature. A place where Democrats and Republicans actually work together. A place where money isn’t everything, and where everything isn’t done at the 11th hour, or later, followed by an orgy of self-congratulation.
We’ve got 50 states. They can’t all be governed by lawmakers who embarrass their constituents. Which ones function well, and why? What conflict-of-interest, campaign-spending or other rules do they have that help keep things in line? What makes them different, and how can we export their success to the rest of our capitals?
from Reuters Investigates:
Today's special report from Kyle Peterson takes an in-depth look at the development of Boeing's 787 Dreamliner. Boeing went further than ever before in outsourcing much of the work on the plane, upsetting its unionized workers in the Seattle area. This graphic shows why.
So what's the result?
A revolutionary, light-weight aircraft that is nearly three years behind its delivery schedule.
Boeing defense chief Dennis Muilenburg startled many this week when he told the Reuters Aerospace and Defense Summit he would not rule out the possibility of a large-scale merger. Is he sending up a trial balloon to gauge the Pentagon's reaction? *View article *Read more at the Aerospace and Defense Summit
Two of the world's biggest private equity firms, KKR and TPG, are potentially interested in Foster's wine business, but they are not currently working on rival bids, sources told Reuters. Earlier this week Foster’s rejected a $2.5 billion offer for its wine business as too cheap. *View article
from Summit Notebook:
For some fans, Boeing's first test flight of its new 787 Dreamliner this week was apparently a virtual postcard.
The aerospace company says people sent about 25,000 postcards electronically of the lightweight commercial plane made primarily from carbon-based plastics and titanium.
from Breakingviews:put it: "Many of our competitors are losing money, consolidating or going bust." His threat to "end the relationship" with Boeing sounds entirely plausible. The market disliked the idea of Ryanair distributing profits to shareholders rather than reinvesting, but it makes eminent sense. Both BAA in Britain and its "clueless" counterpart in Ireland, the DAA, have invested billions in extravangant projects at London Heathrow and Dublin, and the airline industry is riddled with examples of vainglorious expansion. O'Leary has built Ryanair by unrelenting focus on costs and prices. His grandstanding about "stupid" tourist taxes in the UK and Ireland on planes (but not trains or ferries) and his earlier suggestions about getting passengers to stand are merely light entertainment; the real proof of the model is 2.5 billion euros in cash on the balance sheet, and a pay freeze rather than pay and job cuts for the company's 7,000 employees. Shareholders in airlines are used to getting wiped out by their management's ambitions. Ryanair is a demonstration that it does not have to be so.
from From Reuters.com:
* Boeing is expected to report a third-quarter loss tied to charges related to delays for its 787 Dreamliner and 747-8 freighter aircraft.
from Environment Forum:
After nearly 25 years in the computer science and aerospace industries, including a stint at NASA's Jet Propulsion Laboratory, Doug Caldwell decided to pursue a career-long dream of putting his engineering skills to use for the environment. So the Southern California native left his own start-up, a company that builds cameras for spacecraft launch systems, to explore his options.
He didn't have to look far, or for very long. Within months Caldwell had landed work on a solar power development project, recruited by an old buddy from his days launching model rockets in the desert. Perhaps more ironic is the company he ended up working for -- Boeing Co.