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Hurricane Katrina

FEMA cash still flowing to no-competition contracts

By Associated Press
Published October 15, 2005

WASHINGTON - The government is spending $347-million on Hurricane Katrina-related contracts that were awarded with little or no competition, despite a public pledge by FEMA's chief to reopen no-bid agreements.

In its most recent weekly spending report to Congress, the Homeland Security Department detailed 73 contracts awarded on a basis of "other than full and open competition." Most of the contracts on the Oct. 13 list provided travel trailers, communications systems and food from the disaster relief fund run by the Federal Emergency Management Agency.

Last week, FEMA acting director R. David Paulison told senators: "All of those no-bid contracts, we are going to go back and rebid." Later that day, FEMA officials said they would rebid only four contracts of up to $100-million each - a point spokesman Larry Orluskie repeated Friday.

"A lot of the contracts that were previously awarded without competition are completed or are beyond the point where it would be economically feasible to re-compete," Orluskie said. He said it wasn't yet known how many of the contracts were completed.

"The whole competition process doesn't happen overnight," said Orluskie, defending contracts that were quickly awarded as Katrina loomed. "And when it's about saving lives and protecting property, you need it now."

FEMA is an arm of the Homeland Security Department, which is required to report weekly on how it is spending $62-billion Congress approved in disaster relief after Katrina slammed into the Gulf Coast on Aug. 29. The fund includes relief money for victims of Hurricane Rita, which hit two weeks later.

As of Oct. 10, FEMA had awarded $2.3-billion in contracts for Katrina recovery efforts, agency documents show. The new totals show no-bid and limited competition agreements make up about 15 percent of all hurricane relief contracts.

At an Oct. 6 hearing of the Senate Homeland Security Committee, Paulison defended the initial need for no-bid contracts to get help to hurricane victims as quickly as possible. But he said those agreements should be reopened to competition to prevent any waste or abuse of federal funds and save taxpayer's money.

FEMA is rebidding contracts to four firms - Bechtel Corp., Fluor Corp., the Shaw Group and CH2M Hill - that were approved before or as Katrina hit. Each of the agreements has a $100-million spending cap, but the four companies had spent only a combined $132-million as of last week, FEMA officials said.

[Last modified October 15, 2005, 01:16:10]

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