Auditors question Katrina contracts
Published 9:00 pm Thursday, September 22, 2005
WASHINGTON – Government auditors are questioning whether several multimillion-dollar Katrina contracts – including one involving a Halliburton Co. subsidiary – invite abuse because they are open-ended and not clearly defined.
The contracts, for services such as levee repair and emergency housing, were granted to companies based on their pre-existing business relationships with the government. Critics say the arrangements foster cronyism because a few repeat players typically get the best deals.
The General Accounting Office and the Homeland Security Department, which has primary responsibility for reviewing the billions of dollars worth of Katrina contracts, said they will focus on the agreements that were awarded with little or no competition.
They include “indefinite delivery-indefinite quantity” contracts such as those involving Halliburton subsidiary Kellogg, Brown &Root Services Inc. of Arlington, Va., and San-Francisco-based Bechtel Corp. Both firms have strong ties to the Bush administration.
“We’ve been looking at all the contracts from day one,” said Richard Skinner, the Homeland Security Department’s inspector general. “One concern is whether you are getting the fair market value. The second is whether the people we are giving contracts to are the best qualified.”
Of the 22 contracts awarded so far by the Army Corps of Engineers, 11 are so-called ID-IQs; so are several granted by the Federal Emergency Management Agency.
One such contract is a $16 million government work order given to the subsidiary of Halliburton, the company headed by Vice President Dick Cheney from 1995 to 2000 that has been cited for overcharging the government for work in Iraq. The deal, to plug levee breaches, was awarded as part of a pre-existing Navy construction contract.
Previous government audits have cited these type of contracts as highly vulnerable to abuse because government officials and companies can exploit their terms, which tend to be broadly defined, such as services as for “management improvement.”
