USDA Criticized Over  Tobacco Contract

Source from:  By NANCY ZUCKERBROD WASHINGTON (Associated Press Writer) 08/26/2004

The Agriculture Department made several missteps in awarding a contract to a company that was supposed to dispose of 121,000 tons of poor-quality tobacco but never got the job done, according to a government audit released Tuesday. The USDA Farm Service Agency awarded a contract last year to Nicholasville, Ky.-based Biomass Energy LLC to burn the tobacco and turn it into electricity. However, the government ultimately canceled the contract after Ohio officials ruled that Biomass didn't have the proper permits to store and burn tobacco at a facility in that state, according to the report by the USDA inspector general's office. The tobacco was eventually sent to landfills, and the government spent $181,000 on the failed contract. The inspector general's review says Biomass was the lowest bidder, but the agency "did not demonstrate that it had performed a competent assessment of Biomass' ability to perform the work required to successfully complete the contract." The audit found that the South Point, Ohio, facility where Biomass planned to perform the work was not operational when the contract was awarded. The Farm Service Agency did not respond to a request for comment Tuesday. In written comments attached to the report, the agency stated that sufficient information had been obtained to determine the contractor was responsible. Biomass CEO Mark Harris said his company could have gotten the job done but wasn't given the chance to modify an existing permit at its South Point power plant. "We felt like modifying the permit to do that was not a huge deal," Harris said. "We just were not given the ample time to do that." Rep. Ted Strickland, D-Ohio, requested the inspector general's review. "It showed a sloppy process, I think, on the part of the government in awarding the contract to this company," Strickland said. Congress authorized the destruction of much of the 1999 tobacco crop, which was damaged by weather. That prevented farmers from having to face steep cuts in the amount of tobacco they could grow in the future under the government's price-and-production control program. Enditem