Considering Wheelabrator

Source: Frederick News Post
Author: Michael Elmaleh
Article Type:
Date Published: 03/11/2009

The proposed incinerator being considered by the Frederick County Commissioners is an extremely expensive ($520 million) and complicated technology that requires a great deal of technical expertise to operate efficiently. Wheelabrator has submitted a contract to maintain the plant. It is a “cost plus” contract: There is no set cap on management fees that the county may end up paying to operate the plant. The annual service fee to the company could be in the millions. I am a certified public accountant and certified valuation analyst, and my previous experience includes reviewing “cost plus” engineering contracts for the construction of wastewater facilities funded by the Environmental Protection Agency. While these engineering services were complex, they were relatively simple compared to the services that Wheelabrator proposes to provide the county. My observation on these contracts was that the localities were overbilled by millions of dollars due to government auditors’ and administrators’ failure to understand and enforce the complex procurement regulations that applied.