updated 4/10/2006 7:34:54 PM ET 2006-04-10T23:34:54

Government agencies paid inflated prices for goods and services in the aftermath of Hurricane Katrina in a system riddled with waste, three government inspectors general testified at a congressional hearing Monday.

It was the first time the three government auditors — inspectors general with the Department of Homeland Security, Department of Defense and Army — publicly disclosed their figures on government waste in the Katrina rebuilding effort.

The inflated prices were a result of poor planning as well as a lack of proper oversight, the three said.

In the case of debris-removal contracts, awarded to four firms, the auditor general of the Army found that the four subcontracted their work to multiple tiers of subcontractors, resulting in markups between 17 percent and 47 percent.

Similar price hikes were found in other services, including the placing of blue covers on damaged houses and the installation of temporary housing trailers.

The chief of the U.S. Army Corps of Engineers, responding to the reports, said the magnitude of the disaster required the Corps to act outside its normal procedures.

“If we were to follow these usual rules for full and open competition, we would not have been able to award a contract to get the floodwaters out of the city of New Orleans,” said Lt. Gen. Carl Strock.

“You probably saw pictures of helicopters dropping these huge sandbags into the various levee breaches. It was an urgent situation which required expedited procurement,” he said.

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