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FEMA shifts $3.6 billion in hurricane contracts

/ Source: The Associated Press

The Bush administration on Friday awarded up to $3.6 billion in temporary hurricane-victim housing contracts to small and minority-owned firms, saying it was shifting the money from four large companies that had not competed for the work.

All but eight of the 36 contracts — worth up to $100 million each — were rebid to firms in the Gulf Coast region hit by last year’s hurricanes Katrina and Rita, the Federal Emergency Management Agency said.

FEMA acting director R. David Paulison said the contracting shift demonstrates “our commitment to a full and open competition procurement strategy for temporary housing work in the Gulf Coast.”

The funding shift was praised by Rep. Bennie Thompson, D-Miss., a frequent FEMA critic.

“I am glad to see that FEMA is finally doing the right thing, or is at least on the right track to doing the right thing,” Thompson said.

FEMA re-bid the contracts after being accused last fall of overpaying four firms that were given the work without going through a competitive process. Those contracts — for up to $500 million each — were given to Shaw Group Inc., Bechtel Corp., CH2M Hill Inc. and Fluor Corp.

FEMA then defended itself by saying the contracts were not put out to bid to speed assistance to Katrina’s victims. But in October, Paulison told a Senate panel that “all of those no-bid contracts, we are going to go back and rebid.”

In a brief interview with The Associated Press this week, Paulison said, “I promised Congress I was going to bid them out, and that’s what I’m doing.”

Paulison also said FEMA will honor parts of the four no-bid contracts for work already completed.

The newly rebid contracts are for maintenance and dismantling of temporary housing, such as trailers.

FEMA said not all of the firms that won contracts had been notified late Friday afternoon, and the agency could not immediately provide a list of the companies to receive the work.