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Companies to rebid for Katrina recovery efforts

Federal contracts for Hurricane Katrina recovery efforts that were handed out with little or no competition will be rebid to prevent any waste or abuse, FEMA chief R. David Paulison said Thursday.
Clean Up Continues In Storm-Ravaged New Orleans
Sullivan Trucking Co. equipment operator Mark Howard of Kentucky, a FEMA contractor, uses an excavator to remove debris as Selvin Munguia carries trash to the curb from a flood-damaged home near Lake Pontchartrain in New Orleans. FEMA said Thursday it will reassess contracts handed out with little or no competition.Ethan Miller / Getty Images
/ Source: The Associated Press

Millions of dollars in federal contracts for Hurricane Katrina recovery efforts that were handed out with little or no competition will be rebid to prevent any waste or abuse, FEMA chief R. David Paulison said Thursday.

“I’ve been a public servant for a long time, and I’ve never been a fan of no-bid contracts,” Paulison told a Senate panel investigating the Federal Emergency Management Agency’s response to the hurricane. “Sometimes you have to do them because of the expediency of getting things done. And I can assure that you we are going to look at all of those contracts very carefully.”

“All of those no-bid contracts, we are going to go back and rebid,” he said of pacts that were worth millions of dollars.

Paulison said after the hearing that he did not have a total figure for no-bid contracts that have been given, but said they include four agreements for $100 million each for housing and construction services awarded immediately after the storm hit. The government has been accused of overpaying for some contracts that were awarded with unusual haste in an effort to speed assistance to Katrina’s victims.

In the weeks after the storm, more than 80 percent of at least $1.5 billion in FEMA contracts were awarded with little or no competition, or had open-ended or vague terms that previous audits have cited as being highly prone to abuse.

Inspector General Richard Skinner of the Department of Homeland Security told a House subcommittee that 90 percent of the contracts awarded for debris removal in Mississippi were not put out for competitive bids. He said the Army Corps of Engineers had four pre-existing contracts for debris removal, but those four could not handle the overwhelming devastation of the storm.

He said reviewing those no-bid contracts is “high on our priority list.”

Skinner also said that investigators are not seeing the kinds of problems in Louisiana and Mississippi that FEMA was criticized for in responding to hurricanes that hit Florida last year, particularly providing aid to individuals in counties that had little or no damage.

Sen. Joe Lieberman, the top Democrat on the Senate Homeland Security Committee, questioned whether FEMA should look at having contracts for services — including housing and supplies — already in place before a disaster strikes.

“It sure looks with hindsight that FEMA would have been in a much better position if it had had a lot of contracts in place that had been bid that were standby contracts to provide exactly the kind of services that FEMA rushed in to provide on a no-bid basis — and which we fear the taxpayers may have ended up paying more money for than they should have,” said Lieberman, D-Conn.

“Hopefully we can put things in place for the future where we won’t have to depend on no-bid contracts for future use,” Paulison said.

The FEMA chief was one of a bevy of Bush administration officials appearing before a half-dozen hearings to update Congress about the government’s long- and short-term concerns in Katrina’s aftermath. Housing assistance is a top priority as the administration grapples with finding homes for evacuated victims

Sen. Susan Collins, R-Maine, noted that hundreds of thousands of hurricane victims remain in hotel rooms and emergency shelters — despite more than $2 billion already spent by FEMA for 120,000 temporary trailers and mobile homes. Only 109 Louisiana families have been put in those homes, while tens of thousands of state residents remain in shelters, she said.

“More than a month after Katrina’s landfall, frustration, concerns and questions about FEMA’s responsiveness and planning persist as Gulf Coast residents work to put their lives and communities back together,” said Collins, who chaired the Senate hearing.

FEMA estimates that just over 68,200 refugees remain in shelters, down from a high of 300,000 after Katrina hit Aug. 29 and Hurricane Rita’s Sept. 17 arrival.

Last month, FEMA launched a $2 billion program to pay three months of upfront rental costs for homeowners or renters whose residences were destroyed by Katrina. Eligible victims can receive $2,358 per family to rent anywhere in the country, and could continue to get assistance for up to 18 months as FEMA works with state and local authorities to rebuild the devastated communities.

So far, FEMA has spent $1.3 billion to help Katrina victims find homes, and 600,000 have registered for the rental program.

But victims still in shelters face an Oct. 15 deadline, set by President Bush, to find more stable housing — including apartments, trailers and in some cases, hotels. Meanwhile, FEMA is weighing whether to extend a program that reimburses the American Red Cross for the cost of hotel rooms for victims.

That program is set to expire Oct. 24. The Red Cross has spent $112 million on hotel rooms for 464,560 people since Sept. 3, said spokeswoman Carrie Martin.

In another development, Treasury Secretary John Snow, describing the administration’s plans to use tax incentives to rebuild the Gulf Coast economy, told senators the department opposes any proposal to have the credit of the federal government extended to state and local bonds.

“That would be a serious mistake,” he said.

The leaders of the Senate Finance Committee told Snow to carry a message back to the White House that they’re frustrated with the administration for fighting their effort to expand Medicaid health benefits for hurricane victims.

“Unfortunately, the White House is working against me behind the scenes, and I resent that considering how I’ve delivered for the White House so much over the last five years,” said Senate Finance Committee Chairman Charles Grassley, R-Iowa.

“It’s six weeks now. Where is the administration?” asked Sen. Max Baucus of Montana, the panel’s top Democrat. “It is slow-walking, it is opposing, it is obfuscating, it is delaying.”